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New Scientist: If we don't stop burning oil…

FRED PEARCE
THE 20th century was warmer than any time in the past thousand years, but that is nothing compared with how hot the Earth could become over the next millennium.
If we burn all the fossil fuels that are left underground, the globe will warm by an average of up to 13 °C, according to the first serious assessment of how global warming might progress beyond 2100, the normal time frame of model predictions. That will wipe out most rainforests, destroy the fertility of many soils and leave the Arctic ice-free even in midwinter.
London will be as hot as Cairo – except that, along with many of today's most populous areas, it will have been engulfed by an 11-metre rise in sea levels.
So far humans have released about 400 billion tonnes of carbon into the atmosphere, as carbon dioxide, by burning fossil fuels and destroying forests – enough to have already raised global temperatures by around 0.6 °C. Ten times as much carbon remains underground in reserves of oil, natural gas and coal, according to ateamledbyTim Lenton of the Tyndall Centre for Climate Change Research in Norwich, UK. And unconventional fossil fuels like tar sands, oil shales and methane-rich ices called clathrates beneath the seabed may contain another 10,000 billion tonnes.
Lenton and his colleagues studied the likely impact of burning all these fuels over the coming millennium. He says that the oceans would ultimately absorb most of the carbon dioxide, but even so, air temperatures in AD 3000 would stabilise at some 13 °C warmer than today (Climate Dynamics, DOI: 10.1007/S00382-006-0109-9).
Meanwhile, the thermal expansion of the oceans plus the melting of the Greenland ice cap, which is likely to be irreversible above a 2.6 °C wanning, would raise sea levels by some 11 metres. “Only by starting to reduce carbon dioxide emissions now can we avoid the melting of the Greenland ice cap,” Lenton says. Sea level rise could be even greater if the Antarctic ice sheet starts to disintegrate.
If the world burnt all its conventional fossil fuels but left underground all the unconventional forms, then global warming might not exceed 7 °C, according to Lenton's calculations. That already looks unlikely. George W. Bush's call last month for the US to end its addiction to foreign oil produced a flurry of interest in exploiting unconventional sources of oil in North America.
Shell has announced a breakthrough in extracting oil from shale in Colorado, and the US Department of Energy has reportedly identified oil sands in the Canadian province of Alberta as a vital future resource.
Lenton dismisses the theory that a new ice age may be upon us by 3000, counteracting the warming trend. He says variations in the Earth's orbit mean “the current interglacial era is likely to be exceptionally long”.
Lenton's predictions neatly complement a study published last week that pieced together temperatures in the northern hemisphere over the past 1200 years. Tim Osborn and Keith Briffa of the University of East Anglia, Norwich, assembled sets ^of data, such as the growth of tree rings, that act as a proxy for past temperatures. They show significant natural variation during the medieval warm period from AD 900 to 1200 and in the “little ice age” from 1550 to 1850 (Science, vol 311, p 841). The 20th century, and particularly the past 40 years, emerges as a period of exceptional warming that, unlike previous anomalies, covered virtually the whole northern hemisphere.
Climate sceptics have argued that evidence of this past climate variability, which is probably due to solar cycles, suggests we need not worry about future man-made climate change. But Briffa told New Scientist: “Greater natural climatic variability implies a greater sensitivity of climate to forcing, whether from the sun or greenhouse gases. So greater past climate variations imply greater future climate change.” read more

royaldutchshellplc.com and its sister websites royaldutchshellgroup.com, shellenergy.website, shellnazihistory.com, royaldutchshell.website, johndonovan.website, shellnews.net and shell2004.com are all owned by John Donovan. There is also a Wikipedia article.

Stratfor: Sakhalin: That Sinking Feeling

February 21, 2006 17 23 GMT
Summary
Representatives from Royal Dutch/Shell and Japanese energy firms Mitsui & Co., Ltd., and Mitsubishi Corp. are meeting with Russian state energy major Gazprom to discuss the future of the Sakhalin-2 petroleum project. Before all is said and done, the Japanese will be out, Gazprom will control a very large share of the project, and Shell executives will be extremely depressed.
Analysis
The three participants in the Sakhalin-2 petroleum project — supermajor Royal Dutch/Shell, Japan's Mitsui & Co., Ltd., and Mitsubishi Corp. — are meeting with Russian state energy major Gazprom on Feb. 21 to decide the future of their joint efforts in the Russian Far East.
The Sakhalin-2 project is an offshore oil and natural gas project to the east of Russia's Sakhalin Island that aims to provide liquefied natural gas (LNG) for export throughout the Pacific Rim. The project has been one of the single largest recipients of foreign direct investment in Russia, and the tripartite consortium behind it initially planned to spend $12 billion on its development.
At least that was the plan. In 2005, Gazprom, currently expanding its reach and tightening its grip over Russian energy resources, bullied its way into the project. Though the details are not finalized, Gazprom will soon take 25 percent of Shell's 55 percent stake. Mitsui and Mitsubishi will share the remaining 45 percent. In essence, Gazprom told Shell the same thing it is telling nearly every other foreign energy investor in Russia: Let us in, teach us the technology and pay our way — or we will have your project killed.
These are not idle threats. Gazprom Chairman Dmitry Medvedev is first deputy prime minister, guaranteeing the firm sizable pull with the Kremlin. In addition to being one of Russia's few oil majors, Gazprom is also the state-ordained natural gas monopoly, giving it all the market pull it needs. Some firms, most notably ExxonMobil, simply boarded up their Russian shops and left.
But not Shell. The Anglo-Dutch supermajor has suffered a number of defeats recently, but none more damning than a reserve accounting scandal that would leave even the Enron team impressed. Shell intentionally overstated its reserves by nearly a quarter — an offense that national regulatory bodies, not to mention shareholders, do not take lightly. To be summarily ejected from Sakhalin-2 would have poured fuel onto boardroom fires, and so Shell sued for peace. It accepted Gazprom's offer that it dare not refuse in exchange for a partnership with Gazprom at the Zapolyarnoye field on the Russian mainland that would boost the supermajor's overall reserve holdings.
The first catch came almost immediately. No one ever expected an offshore project in a region with no infrastructure and moving sea ice to be easy or cheap, and costs have spiraled from the initial estimate of $12 billion to $20 billion. Gazprom said this made its involvement in Sakhalin-2 financially questionable, and that it would require additional compensation.
The second catch arrived Feb. 9 when the Russian State Audit Chamber alleged that Sakhalin-2 intentionally selected inappropriate suppliers and contractors, cheating the Russian state out of $2.5 billion in the process — an amount the chamber suggested the Sakhalin-2 consortium should reimburse. Although the audit chamber's decision has no direct legal weight, it often is used by the Kremlin to float policy ideas just before their implementation.
All this proved too much for the Japanese. They wanted to get in on the ground floor of energy development in the Russian Far East in order to secure non-Middle Eastern supplies. Between cost increases, project delays (the first LNG shipment is now set for mid-2008), and Gazprom's pressure tactics, they see no reason to continue with an increasingly bad deal. That became doubly the case when Mitsui and Mitsubishi discovered that the project would have trouble getting financing even in Japan, where money tends to be no object. The Feb. 21 talks are all about how the Japanese can leave the Sakhalin-2 consortium with as much grace as possible (and ideally, still be able to purchase LNG cargoes).
The question now is who gets the Japanese shares. Public discussion of the topic from the firms involved indicates a sale to Shell is in the offing, something the supermajor can certainly afford. Gazprom, in contrast, is extremely cash poor, given that it is the Russian government's largest taxpayer.
But just because Shell is the likely purchaser does not mean it will end up holding all it buys. Gazprom has laid claim to Sakhalin-2, and is likely to bet that Shell's board remains in dire enough straits to capitulate once again. And Gazprom is probably right. read more

royaldutchshellplc.com and its sister websites royaldutchshellgroup.com, shellenergy.website, shellnazihistory.com, royaldutchshell.website, johndonovan.website, shellnews.net and shell2004.com are all owned by John Donovan. There is also a Wikipedia article.

AdRants: Shell Collects Consumer Info With Calling Card Promotion

Shell, in a seemingly innocent effort to give away a free phone card valued at $2 to students away from home during the Chinese New Year, has, according to Tian, distributed promotional pieces around the Arizona State University campus. In order to redeem the offer, students must fill out a web form including email address, name, address and some other optional demographic information. Certainly, this information is needed to send the actual card, however, the promotion's Terms and Conditions state the cards are only available first come first serve causing one to wonder why Shell needs to collect the information from any person who signs up after the cards run out. Surely, Shell knows exactly how many cards it has to give out and could very easily terminate the promotion once all cards have been claimed rather than continue to collect information up to an arbitrary end date thereby building itself a nice fat database of names for future use.
Of course, the sign up form contains check boxes to control whether or not the person wants Shell to contact them in the future but even if these boxes are left unchecked one has to wonder where that person's contact information ends up. Oops…it just mistakenly ended up in Shell's direct marketing department.
It's inconceivable to imagine Shell would not know how many cards it has to give out in the first place and that they would not be able to track this down to the exact, last applicant, at which time, they could close the promotion thus ending the needless collection of names it knows it can't send the card to. Are we over analyzing this or are companies just coming up with ever sneakier means to collect our contact info? read more

royaldutchshellplc.com and its sister websites royaldutchshellgroup.com, shellenergy.website, shellnazihistory.com, royaldutchshell.website, johndonovan.website, shellnews.net and shell2004.com are all owned by John Donovan. There is also a Wikipedia article.

MarketWatch: Shell extends force majeure on Nigeria oil fields

Last Update: 7:24 AM ET Feb 21, 2006
LAGOS (MarketWatch) — Royal Dutch Shell (RDSB.LN) said Tuesday it has extended a force majeure that legally protects it from not meeting its contractual obligations on Nigerian crude oil exports from the EA field and Forcados oil fields.
A company spokesman said the original force majeure, declared in January after militant attacks, had been previously expected to end by late February, the spokesman said. The extension has no time limit, he added.
“No time has been fixed for the end of the force majeure,” the spokesman said.
-Contact: 201-938-5400 read more

royaldutchshellplc.com and its sister websites royaldutchshellgroup.com, shellenergy.website, shellnazihistory.com, royaldutchshell.website, johndonovan.website, shellnews.net and shell2004.com are all owned by John Donovan. There is also a Wikipedia article.

Reuters: Shell extends Nigerian oil export force majeure

Tue Feb 21, 2006 9:42 AM GMT
LAGOS (Reuters) – Royal Dutch Shell (RDSa.L: Quote, Profile, Research) extended a contractual exemption clause on exports of Nigerian crude oil from the EA and Forcados fields on Monday after militant attacks shut output, a company source said.
The force majeure clause, which exempts the company from delivering crude oil under long-term contracts, was initially imposed in January after a first wave of militant attacks, but was extended on Monday after another series of attacks at the weekend. read more

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NewsWire.co.nz: Shell Shuts Down After Fresh Niger Delta Attacks

21 Feb 2006

Shell oil has shut down its operations in the Niger Delta following another attack on an installation in the region.

The group holding nine foreign oil workers claimed a fresh attack on another facility and an explosion which destroyed a military house boat.
Three Americans and a Briton and Filipino were among those abducted at the weekend while laying a Shell pipeline.
Shell has cut production by 450,000 barrels a day, one-fifth of Nigeria's oil output.
The latest attacks have not been confirmed by the Nigerian authorities.
The Nigerian government has accused militants in the region of smuggling oil and called the abduction of workers a criminal act. read more

royaldutchshellplc.com and its sister websites royaldutchshellgroup.com, shellenergy.website, shellnazihistory.com, royaldutchshell.website, johndonovan.website, shellnews.net and shell2004.com are all owned by John Donovan. There is also a Wikipedia article.

The Telegraph: Nigerian militants step up attacks and threaten president

By Charles Pym in Lagos
(Filed: 21/02/2006)
Militia fighters carried out a series of fresh attacks on Nigeria's oil installations yesterday, blowing up Shell Oil pipelines and a houseboat used by soldiers.
Two days after kidnapping nine oil workers, including a Briton, John Hudspith, the attacks by the Movement for the Emancipation of the Niger Delta (Mend) raised the pressure on Shell and other major producers in the region.
These companies account for most of the country's daily output of 2.4 million barrels of crude oil.
Violence has shut down more than a fifth of Nigeria's oil production but much more could still be affected.
Two militia fighters were killed in a gunfight during the hostage-taking and the army has confirmed that 14 of its men also died. Since then, the military has not launched any fresh offensives despite the new militia attacks.
A ringleader of the militants said that they killed 11 soldiers in a 40-minute gun battle near Shell's Chanomi Creek hub of pipelines yesterday, although this could not immediately be confirmed by the army.
A Shell spokesman, Lisa Givert, confirmed the pipeline attack but said the houseboat was abandoned when it was blown up. It was unclear who owned the boat.
The militants also gave warning that it would kill President Olusegun Obasanjo if he entered the region. The government did not comment.
“We are declaring a war on Obasanjo,” a spokesman said. “We will attack and kill him should he venture into the Niger Delta for any reason.”
The group also threatened to attack a Shell Oil tanker “and execute everyone on board”.
There were conflicting reports on the health of the hostages. One of three Americans has high blood pressure and is “seriously sick”, said the militia ringleader, on condition of anonymity.
A Mend spokesman, Jomo Gbomo, said they were all in good health.
“But we received intelligence reports that in spite of our attacks and warnings Shell continues to operate in the Forcados area,” he said in an e-mail.
Nigeria is the world's eighth largest oil exporter, and accounts for 10 per cent of America's oil imports.
Shell has shut down a key export terminal and an offshore field accounting for 455,000 barrels per day because of the unrest, but is still pumping in other areas.
A security official said that Chevron had pulled out non-essential staff from areas affected by violence.
However, hundreds of expatriate workers remain in its Escravos export terminal, even though two oil pipelines leading from there were blown up at several points by militants over the weekend.
The latest round of attacks was triggered by army air raids on ethnic Ijaw villages last week, in which militants claim that more than 20 people were killed. read more

royaldutchshellplc.com and its sister websites royaldutchshellgroup.com, shellenergy.website, shellnazihistory.com, royaldutchshell.website, johndonovan.website, shellnews.net and shell2004.com are all owned by John Donovan. There is also a Wikipedia article.

The Guardian: Nigerian militants step up sabotage of oil installations

· Crude price rises as attacks disrupt supply
· Shell evacuates staff after pipeline targeted

Rory Carroll Africa correspondent Larry Elliott
Tuesday February 21, 2006
Militants in the Niger delta mounted fresh attacks on oil installations yesterday, extending a wave of sabotage which has crippled exports from Africa's leading oil producer. The guerrillas seized a Nigerian army post in waterways east of the city of Warri after soldiers fled, allowing them to dynamite a floating barracks block and an oil pipeline operated by Royal Dutch Shell.
A Shell spokeswoman confirmed the oil pipeline attack, and said the boat was abandoned when the attackers blew it up. It was unclear who owned the boat. The Anglo-Dutch multinational, the biggest foreign operator in Nigeria, has evacuated all its facilities in the immediate area, a stretch of creeks and swamps which normally produces 500,000 barrels a day.
The attacks sent oil prices surging in London amid concern that the world's eighth largest producer was facing months of turmoil. Despite reassurances from the International Energy Agency (IEA), threats of further action from the rebels against installations in the Niger delta pushed up the price of a barrel of Brent crude by $1.46 to $61.35 in the City. Geoff Pyne, an independent oil consultant, said: “There is a realisation that no one can be complacent about supplies.” But IEA analyst Harry Tchilinguirian said that high US fuel stocks and refinery maintenance should soften the blow of losing so much Nigerian oil. “Yes, it's a disruption of a sizeable amount. But in the short term we have very heavy inventories and very heavy maintenance in the United States, so you can mitigate some of it,” he said.
Yesterday's violence followed a series of raids at the weekend which damaged several installations and resulted in the kidnap of nine foreign employees of a Shell subsidiary. A spokesman for the militants said their fate had not been decided.
The group of three Americans, two Thais, two Egyptians, a Filipino, and a Briton – John Hudspith – were seized by up to 40 gunmen who stormed a pipe-laying barge. In emails to news agencies, the Movement for the Emancipation of the Niger Delta (Mend) said its goal was to punish oil corporations and the government for siphoning off the region's wealth without returning anything to its impoverished ethnic Ijaw communities; as well as saying the hostages' fate had yet to be decided, the movement also warned that they might end up being killed in crossfire with the army. Government officials say the militants are bandits whose real aim is to sow chaos so they can steal the oil, a practice known as bunkering.
The militants set a target last month of halting a third of Nigeria's 2.5m daily barrels, most of it sweet crude bound for refineries in the US and Europe. If yesterday's attacks are confirmed, that target could be reached soon. The Mend statement said that it overran an army houseboat and an oil pipeline switching station. “Both were destroyed with explosives,” it said. No casualties were reported.
Shell confirmed several flow stations had closed. On Sunday the militants threatened to fire rockets at international oil tankers, the first time such a threat had been made. The military said it could guarantee the security of shipping but admitted it did not know the capability of its foes. Much of their arsenal was supplied by the government in 2003 to help control the delta during elections.
Backstory
Militant groups in the oil-rich Niger Delta have fought the government and the oil industry for 15 years, demanding a greater share of oil revenues and compensation for environmental damage. They have attacked oil facilities and taken hostages. The Movement for the Emancipation of the Niger Delta is fighting for control of the area's oil wealth, saying local people have not benefited. In 1995 Ken Saro-Wiwa, a writer and campaigner, was executed. One group has demanded $1.5bn (£860m) from Shell to compensate for pollution. Stealing oil from pipelines has resulted in fatal explosions. Analysts say attacks will halt up to 20% of the delta's crude production this year. read more

royaldutchshellplc.com and its sister websites royaldutchshellgroup.com, shellenergy.website, shellnazihistory.com, royaldutchshell.website, johndonovan.website, shellnews.net and shell2004.com are all owned by John Donovan. There is also a Wikipedia article.

Lloyds List: Protesting too much, too late

Lloyds List; Feb 21, 2006
SHOWING what might be described as a typically up-to-the minute appreciation of the maritime industries, the intervention by a number of US politicians to prevent the takeover of P'O by DP Ports must be regarded with certain scepticism. In that virtually all of America's exports and imports are transported in foreign bottoms, after politicians of all colours colluded in the relegation of the US flag to the domestic coasting trades, one must ask whether this sudden burst of patriotic apprehension about the beneficial ownership of a number of terminals is a trifle precious.
If the P'O deal has been in the public domain for months, and security issues certainly discussed in the due diligence process, why has it taken until now for the politicians to break cover? A cynic, who might have noted the huge lack of political interest in the maritime industry in the US over many years, might conclude that it is the sort of risk-free populist cause that will attract the attention of politicians wishing to embarrass the current administration.
It is worth recalling that the US has form in this respect, with the fuss generated some years ago when a major Chinese shipping company was negotiating to acquire its own terminal in the San Francisco Bay area. Regardless of the fact that China had become the biggest exporter of goods to the US, this was deemed a move too far.
Politicians aside, the position of joint venture partners who find that their bedfellows have changed without their being asked are, perhaps, in a stronger position. But it is a fact of modern day business that these things happen, and it is premature for such a joint venturer to start playing the national security card when there is not a shred of evidence to suppose that the change of ownership to Dubai will prejudice security in any way. The discommoded partners can always walk away.
US ports and terminals, which, let's face it, are not regarded as a benchmark for efficiency or productivity, will assuredly benefit from a more 'international' approach, and modern port operations is an important global industry that is of unquestioned benefit to everyone. Generating a huge security scare for some political advantage is crass. The objectors should get real and consider who is going to be running these terminals. Mostly Americans, like they do today.
A GROWING law and order problem in Nigeria has forced Shell to shut down a sizeable portion of that country's oil exports. The seeds of a full-blown insurrection, with hostage-taking and increasingly serious firefights between government forces and rebels, is not an ideal background for the development of a reliable energy industry.
A descent into anarchy in the strategically important Delta, an oilfield of immense importance to Nigeria, is a dreadful prospect for a country that has the potential to be the richest in Africa. It is doing no good to Shell either.
There seems little sign that the authorities have any real idea of how to address this crisis other than through military intervention. With the rebels busily engaged in oil smuggling, financing further purchases of arms, a more imaginative approach would appear necessary before there is a complete breakdown.
IT IS, of course, too early to decide what caused nearly 100 containers to be lost from containerships in two separate and unconnected incidents in European waters last week. Some might suggest that it is merely something to be expected at this time of year and it is happening every day of the week. Old-fashioned people still cling to the notion that piling boxes seven high on deck does not demonstrate clever naval architecture.
Lloyd's List
69-77 Paul Street, London EC2A 4LQ read more

royaldutchshellplc.com and its sister websites royaldutchshellgroup.com, shellenergy.website, shellnazihistory.com, royaldutchshell.website, johndonovan.website, shellnews.net and shell2004.com are all owned by John Donovan. There is also a Wikipedia article.

Lloyds List: World oil prices soar as Nigeria rebels strike

Martyn Wingrove
Lloyds List; Feb 21, 2006
OIL PRICES soared and Nigerian offshore workers went on high alert after militants attacked oil facilities and took nine people hostage.
Crude export facilities were again the target for Nigerian rebel groups over the weekend, with militant leaders warning of more attacks on platforms, supporting vessels and possibly tankers.
Oil output from the world's eighth largest crude exporter is down some 450,000 barrels to around 2m barrels per day after Royal Dutch Shell's Forcados terminal was attacked and the EA field evacuated. Oil prices in London climbed $1.50 to around $61.50 a barrel in yesterday's trading and more rises are expected today after New York opens for the week after the Presidents' Day holiday.
Nine foreign workers were abducted at the weekend from a service barge operated by US contractor Willbros, including three Americans, two Egyptians, two from Thailand, one from the Philippines and a British security consultant.
Rebels on speedboats attacked Shell's Forcados terminal 50 kms west of Warri, hitting a pipeline and a tanker loading platform.
'We are investigating the damage and we evacuated the EA field as a precaution,' said a Shell spokeswoman. We have shut in 115,000 barrels of daily oil production at EA and all of the oil production from our western delta area a total of 455,000 bpd gross.'
Force majeure continues for Forcados and EA tanker loadings after it was imposed in January when the Trans Ramos pipeline was blown up and EA facilities were attacked.
Militants have warned of more attacks on production and export facilities, threatening to reduce Nigeria's exports by 30%. They have also warned that tankers and barges could also become targets.
The Movement for the Emancipation of the Niger Delta said it carried out the attacks in retaliation for Nigerian army strikes on villages. It claims to be acting for the Ijaw tribe to claim a greater share of the region's oil wealth, but the government has claimed the rebels are a front for illegal oil exports. read more

royaldutchshellplc.com and its sister websites royaldutchshellgroup.com, shellenergy.website, shellnazihistory.com, royaldutchshell.website, johndonovan.website, shellnews.net and shell2004.com are all owned by John Donovan. There is also a Wikipedia article.

THE NEW YORK TIMES: Violence in Nigeria Sends Oil Higher

By JAD MOUAWAD
Published: February 21, 2006
Oil prices rose sharply yesterday after a series of attacks in the Niger Delta that shut down nearly a fifth of Nigeria's oil production.
In Visits to 3 States, Bush Pushes Alternative Energy (Feb. 21, 2006) Brent crude oil for April delivery jumped $1.57 a barrel, to $61.46, on London's ICE Futures exchange. The market in the United States was closed because of Washington's Birthday.
Tensions in the oil-rich Niger Delta have flared since Saturday after militants kidnapped nine foreign oil workers, set pipelines on fire and disrupted a major export terminal in the latest series of clashes between local ethnic groups and the Nigerian central government. As a result of these attacks, Nigeria's oil production has been cut by 455,000 barrels a day out of a total of about 2.5 million barrels, according to Royal Dutch Shell, the main foreign producer in Nigeria.
A major oil field was shut down as a precautionary measure, Shell said.
The threat to oil supplies from Nigeria, Africa's largest oil producer, comes at a time of heightened concerns about the security of global supplies given the overall tightness in production and the rising demand for oil. Because there is little spare capacity in a global oil system that consumes some 84 million barrels of oil a day, small incidents can have broad effects.
“The incidents in Nigeria are happening at a time when geopolitical events seem to be following each other at a near-continuous rhythm — the worsening of Iraq's oil industry, the tensions with Iran, or the continuous war of words with Venezuela's Hugo Chávez,” said Frédéric Lasserre, the head of commodity research at Société Générale in Paris. “It's a long list, and it fosters a climate of very volatile oil markets.”
Rebels with a group called the Movement for the Emancipation of the Niger Delta have threatened more violence in a campaign to free two imprisoned leaders, according to the Reuters news agency.
The rebels aimed to cut Nigeria's oil production by 30 percent and warned all foreign workers to leave the delta immediately, Bloomberg News said.
Nigeria is the fifth-largest oil exporter to the United States, after Mexico, Venezuela, Canada and Saudi Arabia. Nearly half of Nigeria's oil exports go to the United States.
According to Shell, the Forcados loading platform, which is located about 20 kilometers offshore, was set on fire while a pipeline was blown up on Saturday.
The nine foreign contractors who were kidnapped on Saturday — three Americans, two Egyptians, two Thais, one Briton and one Filipino national, working for Willbros Group of Houston — were working on a pipe-laying barge.
On Monday, another pipeline was damaged in a new explosion, said Caroline Wittgen, a spokeswoman for Shell in London. Shell has maintained a declaration of “force majeure” for the Forcados terminal, meaning it can no longer honor delivery of its supplies. Last month, the company had already been forced to cut its output sharply because of previous attacks. Analysts said the weekend events showed the rebel groups were willing to step up pressure on the government by aiming at offshore oil facilities, which had largely been spared so far.
“We would expect the potential for further chaos in Nigeria to provide a floor for prices above $60, and we expect that Nigeria will continue to be a major issue in terms of supply security,” Kevin Norrish, an analyst at Barclays Capital in London, wrote in a note to investors.
Armed ethnic groups in the Niger Delta, one of the country's poorest regions, have been fighting for years for a better distribution of the country's oil wealth. Recently, they have increased their attacks to protest the government's crackdown on the theft of oil, a common practice known as “bunkering,” and the arrest of a prominent militia leader.
Since mid-December, incidents in the Western part of the delta have regularly shut down about 10 percent of the country's oil production. Four foreign workers were abducted in January by the Movement for the Emancipation of the Niger Delta and were held for three weeks before being released.
“Such escalating attacks are likely going to be the norm, rather than the exception, for the remainder of 2006,” according to the Eurasia Group, a consulting firm based in New York. It said that the “well organized and sophisticated attacks against oil installations this year will likely regularly disrupt about 10 percent to 20 percent” of Nigeria's supplies.
The country's oil is particularly sought by refiners, especially in the United States, because it is a light, sweet variety that is easier to refine than the thicker, sulfur-rich oil that comes from the Middle East or Venezuela.
Still, analysts said, one mitigating factor against further price increases might be the high level of commercial inventories held in consuming countries. While oil prices remain high because of political tensions, there is no lack of oil sloshing around.
“The markets are very well supplied right now,” Mr. Lasserre said. “Stocks are at a high level and buyers are not queuing up at the door of producers asking for more oil.” read more

royaldutchshellplc.com and its sister websites royaldutchshellgroup.com, shellenergy.website, shellnazihistory.com, royaldutchshell.website, johndonovan.website, shellnews.net and shell2004.com are all owned by John Donovan. There is also a Wikipedia article.

Lloyds List: Talisman buys Shell stake in Auk and Fulmar platforms

Canadian firm plans to develop satellites having gained control of virtually all assets in Clyde area, writes Martyn Wingrove
Feb 21, 2006
TALISMAN Energy has acquired Royal Dutch Shell and ExxonMobil's interests in the Auk and Fulmar oil production platforms in the UK central North Sea.
The Canadian oil firm intends to invest in both facilities to boost production and reduce operating costs.
The deal will see Talisman expanding its position around the Clyde area, where it already operates one platform, plus the Orion satellite and an interest in the Fulmar oil pipeline.
'This is a good business opportunity for us and is a continuation of our successful acquire and develop strategy in the North Sea,' said Talisman's president and chief executive Jim Buckee.
Talisman has agreed to purchase Shell and ExxonMobil's 85.8% interest in Fulmar and 100% in Auk, but remains tight-lipped on the price and other conditions.
The Fulmar and Auk platforms lie in central North Sea block 30'16 at the southern end of the UK's oil producing basins.
The Auk platform is more than 30 years old after being installed in 1975 – the field came on line in December of that year. It is currently producing around 7,000 barrels of oil per day.
Its oil is piped to Fulmar, which came on stream in February 1982 and is producing around 4,000 bpd. Both oil streams are exported to Teesside through the Norpipe.
Gas from Fulmar goes through a 290 km trunk pipeline to the treatment plant at St Fergus. Talisman will control the vast majority of assets in the Clyde area after this acquisition, with only Maersk Oil's Janice production semi-submersible close by.
The Calgary-based group will seek to gain efficiencies in offshore operations and will look to develop satellites to the platforms. Talisman has already drilled the Medwin field from the Clyde platform and could be interested in developing the nearby Hailey and Appleton discoveries through these facilities.
'The combined Clyde, Orion, Fulmar and Auk operations could yield a number of operating efficiencies,' said Dr Buckee. 'We believe redevelopment of the Auk field will deliver significant increases in recoverable reserves and production volumes.'
Shell put up for sale its interest in the platforms in April last year, when it also wanted to find a buyer for its Dunlin platform in the northern North Sea.
Meanwhile, the UK Department of Industry, which is yet to approve the Auk-Fulmar deal, has given the green light to four oil and gas projects so far this year.
In January the DTI sanctioned two incremental Nevis projects for ExxonMobil. This will involve more subsea wells tied back to the Beryl platform this year.
It also approved Venture's Goosander project in January, involving subsea wells tied into the Kittiwake platform.
This month the DTI gave Maersk Oil the go-ahead to develop the Dumbarton field, once known as Donan, with the Global Producer III floating production storage and offloading system.
Maersk Oil is moving the vessel from the Leadon field and has started development drilling work.
Maersk has also submitted new plans to develop the Affleck field in block 30'19a as a 28 km tieback to the Janice production facilities, south of Talisman's Clyde platform.
– ConocoPhillips is thought to have found hydrocarbons with its Finlaggan exploration well in block 21'5a and sees it as another potential satellite to the Britannia platform. The US oil major thinks it may need to drill an appraisal well into the new find in order to firm up reserves before moving ahead with a development programme. read more

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Financial Times: Timeline: Origins of the Niger Delta crisis

1966: Isaac Boro, a young delta revolutionary, proclaims a Niger Delta Republic to comprise mainly the delta’s majority tribe, the Ijaw. He launches a “twelve day revolution” in the Niger Delta which is eventually crushed by the Nigerian military.
1967-70: Nigerian civil war sparked by the secession of eastern states. Boro released from prison and used by the Federal government to fight against the secessionist Biafran republic. Boro killed in mysterious circumstances in 1968. Biafra surrenders in 1970.
1993: Military annuls elections. Protests in Nigeria including the delta.

1995: Writer and delta activist Ken Saro-Wiwa hanged by military junta of Sani Abacha after a hasty trial on charges of conspiring to murder. Saro-Wiwa, from the minority Ogoni tribe, had been an outspoken critic of Shell and the military regime. Nigeria is expelled from the Commonwealth until 1998.

1999: End of military rule after President Olusegun Obasanjo, a former military ruler wins civilian elections. Scores of people massacred in the delta town of Odi by security forces after the killing of 12 policemen by delta militants.
2000: 12 northern states declare Islamic Sharia law.
2003: Scores die in ethnic fighting after an Ijaw uprising in the western delta forces oil companies to shut down 40 percent of the country’s oil production.
2004: Delta militant Mujahid Dokubo-Asari threatens an “all out war” against the Nigerian oil industry saying elections in 2003 were rigged. His men battle Nigerian troops from their jungle hideaways. He eventually disarms after the government brokers a peace accord with a rival militia.
2005: Military raid devastates the delta town of Odiama after a land dispute with a neighbouring community results in the killing of local councillors. Nigeria’s Senate goes on a fact finding mission but never publishes its report.
2005: Dokubo-Asari teams up with other civilian activists who accuse President Obasanjo of presiding over a “civilian dictatorship”. He draws comparisons with himself, Isaac Boro and Ken Saro-Wiwa. Nigerian authorities arrest and charge Dokubo-Asari for treasonable felony after he allegedly calls for the disintegration of the Nigerian state in a newspaper interview.
2005: Government starts locking up leaders of various separatist groups and militia across the country.
2005: British police arrest Diepreye Alamieyeseigha, Nigeria’s only Ijaw governor, at London’s Heathrow airport and charges him with three counts of money laundering. The governor escapes back to Nigeria where he resumes office before eventually being impeached. Alamieyeseigha is one of several prominent Ijaws who have called for more oil revenues to be shared between oil-producing delta states. Many Ijaw leaders complain Alamieyeseigha’s arrest is an example of selective attacks on corruption.
2005: Political tensions rise across as Nigeria heads towards elections in 2007, when President Obasanjo is due to step down after two terms in office. Opposition rises across the country against rumours of a possible third term bid by Obasanjo. The president neither refutes or confirms the rumours.
2006: Delta militants calling themselves the Movement for the Emancipation of the Niger Delta start carrying out serious attacks against oil facilities. Four foreign hostages are kidnapped in January and later released. Militants step up attacks in February in an apparent retaliation against military operations in the delta, taking nine more hostages and destroying part of an export terminal. The militants say they are partly fighting for the release of Dokubo-Asari and Alamieyeseigha and demand $1.5bn in compensation payment for environmental damage from Shell.
2006: Security forces move Dokubo-Asari to an undisclosed location for “his own safety”.
2006: At least 15 people die after a protest against Danish cartoon depictions of the prophet Mohammed turn bloody. Tensions are high in the north after the federal government puts a ban on Islamic police in a northern state. Analysts say political tensions across Nigeria could feed into the delta’s crisis. read more

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Financial Times: Fresh militant attacks force up price of crude

By Kevin Morrison
Published: February 21 2006 02:00 | Last updated: February 21 2006 02:00
Oil prices rose by more than $1 in London yesterday following further sabotage on production and distribution facilities in Nigeria. Attacks by militants, including the kidnapping of nine oil workers on Saturday, have led to a 25 per cent cut in oil exports from Nigeria, the world's eighth biggest crude exporter.
IPE Brent for April delivery added $1.65 to $61.54 a barrel by the close of London trade. The New York Mercantile Exchange was closed for the Presidents' Day holiday in the US. Benchmark West Texas Intermediate ended at $59.88 on Friday.
Fresh attacks were reported yesterday against the Nigerian army anda Royal Dutch Shell oil installation.
The attacks have forced Shell to suspend 455,000 barrels a day of output, about 19 per cent of Nigeria's total.
Although Nigeria's supply problems come while markets are fairly well supplied with oil, the disruption could reduce the likelihood that the Organisation of the Petroleum Exporting Countries will cut production when it meets on March 8.
Nigeria, an Opec member, had been pumping about 2.4m barrels per day of its light, sweet crude oil, which is highly sought after because it is easier to refine into petrol.
Nigeria's geographical location means it is well placed to serve the US and Europe.
Concerns about Nigerian oil supplies pushed up the March IPE gasoil contract by $14.25 to $541.50 a tonne.
UK natural gas futures jumped more than 20 per cent to its highest price in four weeks on the temporary closure of the country's biggest gas-storage site following a fire last week. Centrica, the owner of the Rough gas storage facility, said it did not expect to open the site for a month, which is longer than the market had expected.
IPE natural gas for March delivery add 12.23 pence to 67p per therm.
Gold prices were pushed higher by the rise in the oil price. Gold was quoted at $555.60/$556.50 a troy ounce, up almost $4 from the late quote in New York on Friday. Platinum gained about two per cent on the day to $1,028 an ounce.
Copper prices continued to recover from the large losses incurred two weeks ago with the three-month copper contract on the London Metal Exchange rising for the third successive session. The benchmark contract added $92 to $4,900 a tonne. It has now recouped more than half of its decline from the record high of $5,100 a tonne reached two weeks ago.
The three-month aluminium price gained $68 to $2,373 a tonne, but is still down more than 11 per cent from its 17½ year high reached two weeks ago. Zinc added $86 to $2,131 a tonne. read more

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Financial Times: Nigerian oil industry helpless as militants declare war on Obasanjo

By Dino Mahtani
Published: February 21 2006 02:00 | Last updated: February 21 2006 02:00
Villagers in Okerenkoko, once a peaceful settlement along a creek in Nigeria's oil-producing delta region, have feared for weeks what a big military operation against a guerrilla insurgency could bring.
“Helicopters have been flying over us, and there have been navy boats shooting warning shots in the air. Some people have fled and not come back,” says Talbort Babanimi, a fearful village elder.
Okerenkoko's fishing community lies in the middle of the Niger Delta's labyrinth of swamps and creeks; the village is also near the centre of a military campaign to stop attacks by militant groups on oil and gas facilities, including on a major export terminal operated by Shell, Nigeria's largest oil producer.
Shell halted 455,000 barrels a day of oil production, or 19 per cent of Nigeria's output, after pre-dawn raids on installations in the western delta over the past three days. The Anglo-Dutch company closed 340,000 barrels a day of production from facilities feeding its Forcados export terminal, and halted another 115,000 barrels from a nearby offshore field.
As a precautionary measure, Shell said it was evacuating staff from remotelocations in the eastern delta.
Fresh attacks yesterday destroyed a crude oil installation and a Nigerian military houseboat. Some oil industry officials said mass evacuations could take place if the attacks intensified.
The new wave of violence in the area and the abduction last week of nine foreign oil contractors in the world's eighth-largest oil exporter have rattled international oil markets. On London's futures market yesterday, benchmark Brent oil jumped $1.46 a barrel to $61.35 on fears that Nigeria's problems could create a shortage of oil. The US market was closed.
Nigeria's military has been desperately trying to hunt down the soldiers of the Movement for the Emancipation of the Niger Delta (Mend), a militia that has claimed responsibility for the attacks. Mend said yesterday it was declaring a war on President Olusegun Obasanjo.
The group claims it is fighting for the rights of the delta's majority Ijaw tribe, many of whom say they have been cheated of oil wealth pumped from their land by the central government and oil companies. They say they have also been politically marginalised in rigged elections.
Mend also claims loyalties from many armed groups across the delta and appears to have become a formidable fighting force over the past six months. But its command structure and backers are unclear. “Our movement is fluid and therefore capable of flowing with ease between states of the Niger Delta,” Mend said.
The military has had little success in fighting the insurgents and protecting oil installations. Many of Mend's threatened strikes have been accomplished. The web of mangrove waterways offers hiding spots for speedboats with armed attackers ready to launch rockets on unsuspecting oil workers at flow stations and unprotected oil wells. About 14 soldiers have been killed over the past two months.
“It's easy to avoid the navy, and soldiers,” says Harry, a boatman in the area, as his boat edged beside a fishing boat loaded with oil drums used to store stolen oil.
This weekend's attacks, militants say, were sparked by operations by the Nigerian army near Okerenkoko that bombed oil barges suspected of being used for stealing crude oil. Militants also claim the army machine-gunned villages.
Stolen crude oil helps militant groups buy arms. But the job of the military task force in the delta is made harder by the fact that some army and navy personnel and political figures are also involved in the theft from wells and pipelines.
Nigeria's forces in the delta do not have sufficient boats or manpower to patrol the wetlands. The military also uses local militiamen as scouts, who have been involved in uprisings in the past. Security analysts say the military is riddled with corruption and not disciplined enough to protect the oil industry or local communities. Police employed by the Nigerian state to protect oil facilities often have their salaries handled by the oil companies. “They take on the character of mercenaries who are protecting companies perceived as despoiling the environment,” said Nowa Omoigui, a lecturer at Nigeria's national war college.
The upsurge in violence is the worst in the delta for three years. Heightened political tension across Nigeria in the run-up to presidential elections next year threaten to feed into the delta's crisis. In the run-up to elections in 2003, an Ijaw uprising forced oil companies to shut down 40 per cent of Nigeria's oil output.
The delta violence coincides with unrest in Nigeria's Muslim-dominated north where at least 30 people were killed in violence related to protests over controversial cartoons of the Prophet Mohammed.
President Obasanjo has not yet dispelled suspicions that he may run for a third term in office. He is due to step down next year.
John Negroponte, US intelligence chief, said this month that a third term for Mr Obasanjo could threaten to unleash “major turmoil and conflict” and “could lead to disruption of oil supplies, secessionist moves by regional governments, major refugee flows and instability elsewhere in west Africa”. read more

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The Times: Attacks hit Shell oil production in Nigeria

By Carl Mortished, International Business Editor
VIOLENCE in the Niger Delta has forced Shell to shut down almost half of its Nigerian oil production, a loss of output that threatens the Dutch multinational’s efforts to meet its volume targets.
Shell has shut down its Forcados oil export terminal after attacks on installations in the Eastern Delta over the weekend by a militant rebel group that also took hostage nine foreign workers employed by a Shell contractor.
Fears of further sabotage caused Shell to stop production at its offshore EA field, close to the Forcados oil terminal. The combined closures, including the loss of oil from previous damage to pipelines, leaves Shell and its venture partners with the loss of 455,000 barrels per day, almost one fifth of Nigeria’s total oil output.
The escalating loss of barrels will be a setback to Shell, which is struggling to keep its annual output within a range of 3.5 million to 3.8 million barrels per day.
The violence prompted a surge in the price of crude oil on global commodity markets, reversing a recent weakening trend. The price of Brent crude in London gained almost $1.50 per barrel to $61.35.
Rising stocks of crude in the Atlantic basin and evidence that high prices are finally curbing demand have caused the oil price to weaken, but prolonged Nigerian disruption could keep a floor under the cost of crude.
America is a keen customer for Nigeria’s 2.5 million daily barrels of high-quality crude. Nigerian blends are valued for their high gasoline content and lack of impurities. They are easier to distill into high- specification road fuels than alternative crudes from Saudi Arabia, Venezuela or Russia.
The Movement for the Emancipation of the Niger Delta claimed responsibility for the weekend sabotage and hostage-taking, which included an attack on a boat used by Willbros, a United States-based Shell contractor, to lay pipe and the destruction of a pipeline linking oilfields with the Forcados terminal. A spokesman for Shell also indicated that there had been a fire at the Forcados terminal, forcing them to shut the facility. The nine hostages include one Briton, three Americans, two Egyptians, two Thai and one Filipino national.
The rebels have threatened to kill President Obasanjo of Nigeria and remove all foreign oil companies from the Delta.
Insurrection, hostage-takings and violent attacks on oil facilities are a common occurrence in the Delta. However, they have increased in recent months at the same time as an increase in “bunkering”, the theft of oil from pipelines, which the Nigerian authorities blame on criminal gangs that in turn arm and finance the insurrection. Frustration with endemic poverty and corruption, which has prevented development of a non-oil economy in the Delta, has also encouraged the violence. read more

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