February, 2006:

Royal Dutch Shell plc (“Shell”) and Sonatrach, the Algerian national energy company, have signed a Memorandum of Understanding covering multiple business initiatives, both in Algeria and internationally.
Areas of cooperation will include investigating the commercial and technical feasibility for joint developments in Algeria, including upstream development projects, LNG, products and marketing and investigating and evaluating possible asset swap transactions for upstream exploration, development and appraisal projects.
The agreement was signed in the presence of Mohamed Meziane, PDG Sonatrach and on behalf of Shell by Catherine Tanna, Executive Vice President, Africa at a signing ceremony in Algiers.
Ms. Tanna said: “This agreement confirms Shell's interest in investing in Algeria and the growing relationship between our two companies. In this agreement, Shell sees an important opportunity to build on our current activities and relationships in the country by developing new projects and initiatives jointly with Sonatrach, in Algeria and internationally.”
Royal Dutch Shell plc is incorporated in England and Wales, has its headquarters in The Hague and is listed on the London, Amsterdam, and New York stock exchanges. Shell companies have operations in more than 145 countries with businesses including oil and gas exploration and production; production and marketing of Liquefied Natural Gas and Gas to Liquids; manufacturing, marketing and shipping of oil products and chemicals and renewable energy projects including wind and solar power. For further information, visit www.shell.com read more

Feb. 20 (Bloomberg) — Shares of Royal Dutch Shell Plc, the world's third-largest oil company, may drop after Nigerian militants reported new attacks against oil installations it operates in the country.
Militants blew up a Shell oil-pipeline manifold at Odidi in Delta state and an abandoned Nigerian army vessel during an attack at 2 a.m. local time, said the Movement for the Emancipation of the Niger Delta, or MEND. Shell has no immediate comment on the MEND statement, Caroline Wittgen, a company spokeswoman, said today by e-mail from London.
The company yesterday said its ventures in Nigeria have shut down all oil production in the western Niger River delta, halting 455,000 barrels of production a day and prompting increases in international oil prices.
“It's bad news for Shell because the Niger Delta is a significant part of their production,'' said Antoine Leurent, an analyst at KBC Securities in France, who may consider downgrading Shell shares from “outperform.'' “The situation is getting worse because the attacks look much more organized than before.''
The closures include the EA offshore field, which has a capacity of 115,000 barrels a day, and the Forcados export terminal. The shutdown affects about 20 percent of daily output in Nigeria, Africa's top oil producer.
Brent crude oil for April delivery today jumped as much as 2.2 percent to $61.23 a barrel in electronic trading on London's ICE Futures exchange. The contract traded a $61.10 at 7:20 a.m. London time. That's 31 percent higher than a year ago. The New York Mercantile Exchange, the world's largest energy market, is closed today.
To contact the reporters on this story:
Maher Chmaytelli in Cairo at [email protected];
Karl Maier in Khartoum at [email protected] read more

Nigeria Militants Report New Attacks on Shell, Army (Update1)
Feb. 20 (Bloomberg) — Nigerian militants reported new attacks on the army and an oil installation operated by a Royal Dutch Shell Plc venture, two days after taking nine hostages and causing a fire at Forcados offshore export platform.
Militants blew up a Shell oil-pipeline manifold at Odidi in Delta state and an abandoned Nigerian army vessel during an attack at 2 a.m. local time, said the Movement for the Emancipation of the Niger Delta, or MEND.
“We are going to continue with the destruction of oil facilities in Delta state while concluding arrangements for our wider attacks on the entire region,'' Jomo Gbomo, a MEND spokesman, said in an e-mailed statement. Bloomberg couldn't immediately confirm the statement's authenticity.
Shell yesterday said its ventures in Nigeria have shut down all oil production in the western Niger River delta, halting 455,000 barrels of production a day and prompting gains in international oil prices. The closures include the EA offshore field, which has a capacity of 115,000 barrels a day, and the Forcados export terminal. The shutdown affects about 20 percent of daily output in Nigeria, Africa's top oil producer.
The venture MEND said it has attacked today, the Shell Petroleum Development Co., pumps about half of Nigeria's output. State-owned Nigerian National Petroleum Corp. holds a 55 percent stake in the SPDC joint venture, Shell 30 percent, Total SA 10 percent and Eni SpA 5 percent.
Shell has no immediate comment on today's statement by MEND, spokeswoman Caroline Wittgen said by phone from London.
Brent crude oil for April delivery rose as much as 2.2 percent, the most this month, to $61.23 a barrel in electronic trading on London's ICE Futures exchange. The contract traded at $61.10 at 2:41 p.m. Singapore time, 31 percent higher than a year ago. The New York Mercantile Exchange, the world's largest energy market, is closed today.
OPEC Producer
Nigeria produced 2.36 million barrels of oil a day last month, making it the sixth-biggest producer in the Organization of Petroleum Exporting Nations, according to Bloomberg data.
The fifth-biggest supplier to the U.S., Nigeria produces low-sulfur, or sweet, crude oil, prized by refiners for the proportion of high-value gasoline it yields. Shell, based in The Hague and the world's third-biggest oil company, produces about half of Nigeria's output.
Shell is maintaining a “force majeure'' for both the EA field and Forcados that it declared last month, Wittgen said last night by telephone from London. Shell halted another 106,000 barrels a day of output after a Jan. 11 attack on its Trans-Ramos pipeline.
MEND forces on Feb. 18 also attacked a state-owned pipeline at Escravos that carries petroleum products to the northern city of Kaduna and a Shell-run oil pipeline in the Chanomi Creek area.
Shell Targeted
They said yesterday that all oil workers should evacuate the Niger delta “immediately.''
The militants vowed Jan. 30 to launch attacks to cut the export capacity of Nigeria by 30 percent in February, in an e- mailed statement. The group said it targeted Shell because government military helicopters used an airstrip operated by the company to attack villagers in the delta.
“The attack on helpless civilians by the Nigerian government with the assistance of Shell is unforgivable and as previously stated, Shell will pay a terrible price for this,'' the group said in its statement today.
The hostages, employees of Willbros Group Inc., were taken from a boat near Forcados that was under contract to Shell, Willbros said in a statement.
Threats
MEND today said its forces will attack any vessel attempting to load crude at Forcados and “execute everyone on board.''
Among those kidnapped are three U.S. citizens, one from the U.K., two from Egypt, two from Thailand, and one from the Philippines, Willbros said in a Feb. 18 statement.
MEND today also threatened the life of Nigerian President Olusegun Obasanjo.
Obasanjo has set up a committee to work for the hostages' release through dialogue, the Nigerian government said in a statement on Feb. 18.
“We are declaring war on Obasanjo,'' MEND said in its statement. “We will attack and kill him should he venture into the Niger delta for any reason.''
To contact the reporter on this story:
Karl Maier in Khartoum at [email protected]Julie Ziegler in Abuja at [email protected] read more

ASSOCIATED PRESS
February 20, 2006
WARRI, Nigeria — Militants responsible for a string of attacks and kidnappings that have cut Nigerian oil exports by 20% threatened for the first time yesterday to target international oil tankers coming into this West African nation's waters to load crude oil.
The country's military responded by giving assurances that tankers were safe.
The country was already reeling from violence a day earlier that saw nine foreigners abducted and oil installations destroyed across the volatile southern Niger Delta region.
A self-declared commander of the Movement for the Emancipation of the Niger Delta said by telephone his group was poised to escalate the violence by firing rockets at crude-oil tankers offshore.
“We'll use our rockets on the ships to stop them from taking our oil,” said the man, who gave his name as Efie Alari. His identity couldn't be independently verified, but the call came from a number used by the group before.
The military said it would do whatever is necessary to ensure tankers remain safe.
“I don't know their capabilities, but we're not leaving anything to chance,” said Maj. Said Hammed, spokesman of the military task force in the Niger Delta in Warri. “The assurance has been given at the highest level of government that oil tankers are safe in Nigerian waters. That assurance remains.”
Maj. Hammed said no soldiers were killed in Saturday's attacks, contrary to some local newspaper reports that five were killed. He also said there had been no further violence yesterday.
The Movement for the Emancipation of the Niger Delta, which claims to be fighting for a greater local share of Nigeria's oil wealth, said Saturday's attacks were in retaliation for assaults this week by military helicopters. The militants threatened more violence on “a grander scale.”
In an email to the Associated Press, the group claimed responsibility for the raids, including one in which militants abducted three Americans, two Egyptians, two Thais, one Briton and one Filipino.
The attacks began before dawn, when more than 40 militants overpowered military guards and seized the foreigners from a barge on the Forcados estuary belonging to Willbros Group Inc., which was laying pipeline for Royal Dutch Shell PLC.
In Houston, Willbros spokesman Michael Collier confirmed that nine employees had been taken.
In Washington, U.S. State Department spokesman Noel Clay called for the hostages' unconditional release. read more

By Angela Jameson
After a career as an oilman, Paul Skinner is helping a miner to alter its style and extend its reach.
WHEN things are going well, it can be tempting to sit back. In mining right now, that temptation is obvious. Mining companies are making record profits and their shares are attracting a new generation of investors.
However, Paul Skinner, chairman of Rio Tinto, is all too aware of how a carefully nurtured reputation can be damaged. After all, Skinner joined Rio Tinto as non-executive chairman in 2003 after 40 years with Shell. He was a member of Shell’s senior executive committee when the oil reserves scandal broke in January 2003 and in October of that year, when he joined Rio Tinto, the fallout still had a long way to run.
Rio, too, has had its problems. For years it was pilloried by environmental groups. One of the biggest skeletons in its closet was a copper mine in Papua New Guinea, where local people complained that fishing waters were being polluted — a contributing factor to a ten-year civil war. Rio Tinto has since worked hard to carve a reputation of environmental responsibility, with considerable success. The work began under Sir Robert Wilson, Skinner’s predecessor, but the current chairman takes it seriously.
“We are in a cyclical business and markets will not always be so kind to us,” he says. “Our job is to make sure that when they turn, we’re in a strong competitive position. The hate word is ‘complacency’.”
Skinner is just back from Madagascar, where Rio Tinto will begin mining ilmenite in 2008 in a £336 million joint venture with the Madagascan Government. However, Madagascar’s treasures are not just metals. Most of its 200,000 species of plants and animals are found nowhere else on earth.
Rio Tinto has been preparing for its ilmenite mine for years, engaging the local community and developing conservation areas, aided by experts from Kew Gardens.
The company has even managed to convince the WWF, the environmental charity, which opposed the project, that it is worth supporting. Skinner says: “Madagascar has been controversial. But having seen it, I am very reassured about the way that we are going about it.”
The project is based near Fort-Dauphin at the southern tip of Madagascar, the eleventh-poorest country in the world. Before Rio even began exploratory work, the area was threatened by deforestation, as local people relied on forest wood for fuel. Rio will cut trees down, too, but is beginning replanting and is putting precious seedlings in store for reintroduction. Conservationists brought in by the company have already discovered 25 new species.
“What we have done is put in place a very well thought through reafforestation plan,” Skinner says. “I would like to think that in 30 to 40 years’ time, this part of Madagascar will look much better and have much better prospects.
“We will be mining in a sand dune environment and as the dredge advances we will reafforest the dunes. This is a tremendous opportunity not only to execute a successful business project, but to show how to undertake a world-class mining operation in one of the poorest parts of the world and to leave something sustainable.”
It was a wish to work around the world that led Skinner, at 18, to Shell. His first day at Cambridge was effectively his first with the oil giant, since it sponsored his undergraduate studies, which he began by pursuing natural sciences and concluded with exams in law. He certainly saw the world with Shell, taking his wife and family to New Zealand, Greece, Nigeria and Norway. Greece, Skinner’s first posting overseas, saw him in “one of the sharpest commercial environments” he had experienced. “It certainly removed any naivety I may have had,” he says.
In his last job with Shell, running the downstream business, he was chief executive of an operation with 80,000 workers, spread across 140 countries.
Rio Tinto, despite its £30.5 billion market capitalisation, is actually a smaller business. “When I joined I had to think pretty carefully about the way I was going to play a very different kind of role,” Skinner says. “My focus is on managing the governance of the company and maintaining the quality of our board; working with the executive team on strategy, maintaining external stakeholder relationships with host governments, primary investors and NGOs; and making sure there are good succession planning processes.”
When Skinner joined Rio, the experienced Leigh Clifford, who had been Sir Robert’s chief operating officer, stepped up to chief executive. To get to know the business, Skinner spent much of his first two years travelling. More than half of Rio Tinto’s asset base is in Australia and New Zealand, and significant parts are in North America. Rio’s aim is to invest in large, long-life ore assets. The business has grown at an annual 6 to 7 per cent in recent years. At the end of the 1990s, it was involved in an acquisition spree to create sources of growth. Historically, its assets — copper, iron ore, aluminium, diamond, coal and gold mines — have been concentrated in the OECD area. Now Rio is using the cashflow from those assets to enter countries such as Madagascar and Russia, where it recently signed a joint venture deal with Norilsk Nickel, Russia’s largest mining group.
Another responsibility of Skinner’s is to exploit Rio’s lateral links. He wants its mines to share best practice. “Our operational experience across the world can be compared and leveraged to bring our weaker performers up to the standard of our best,” he says. “There is significant value to be created from that.”
Arguably, the new business locations carry greater political and investment risks, making it even more essential for Rio to be aware of its environmental and social responsibilities.
Skinner says: “We have worked hard to understand what those risks are and, in the case of Russia, have equipped ourselves with the best partners we could possibly have.”
China — whose hunger for metals has aided Rio’s performance of late — is another new area where the group may one day dig. At present it is investing to supply China with iron ore from Australia, but there is scope, potentially, to mine in China. Skinner says: “We are doing some interesting exploration in areas of China, but our primary involvement is as a supplier from outside. I wouldn’t exclude becoming an investor on a significant scale in China at some point, but I expect it would happen with partners.”
As Rio’s assets become farther flung, motivating a workforce made up of many diverse cultures becomes even harder. “It is a challenge here and for any global business,” Skinner says. “What is important is that the strategy of the business is clearly articulated.”
Respect for local cultures is critical, Skinner adds. “ ‘Think global, act local’ is a hackneyed phrase, but it does reflect our aim,” he says. “A mining company is very much about the way we relate to communities in which we operate. Perhaps the best example from Rio is the way that we have learnt to work with native tribes and aboriginal people in Australia, Canada and the US. It’s something we attach a lot of importance to.”
After running such a huge business at Shell, one might think it tempting for Skinner to walk away from the watchdog role of chairman of Rio. However, he says: “Every day that I go to work, I learn something new about the business around the world. It’s very satisfying. The day that I wake up and have a negative thought about going to work is the day I stop.”
There must have been plenty of negative thoughts, however, in those last few months with Shell. Skinner had been tipped for its top job, but lost out to Sir Philip Watts, the chairman on whose watch the oil reserves scandal occurred. Some observers have suggested that if Skinner had been chairman, the problem might not have arisen. Others argue that, as a board member at the time, Skinner was culpable by omission.
Asked what went wrong at Shell, Skinner says: “That’s a difficult question to answer because of the legal cases still running. My own prime involvement was in running the downstream business, I take a lot of satisfaction out of seeing that business doing so well now.”
Any regrets that he never got the top job at the company that dominated his working life? “I don’t think I ever laid awake at night thinking about that too deeply,” he says. My philosophy has always been very simply to play the hand the fates deal. To have arrived here in this great company, in the role I have, is all the satisfaction that I ever wanted.”
POWER CV
Name: Paul Skinner
Age: 61
Education: Pembroke College, Cambridge; Manchester Business School
Home: Winchester
Job: chairman, Rio Tinto, since 2003
Previous career: with Shell from 1966, including posts in Nigeria, Norway and New Zealand. President, Shell International Trading Company from 1991 to 1995; chief executive, oil products, Royal Dutch/Shell from 1999 to 2003; group managing director, Royal Dutch/Shell from 2000 to 2003. On Shell’s executive committee of five managing directors
Other positions: non-executive director of Standard Chartered and Tetra Laval. Chairman of ICC UK, which promotes trade. Board member of Insead, the French business school
Family: married, two sons
Hobbies: skiing, outdoor sports, opera and history
THE LEADER IN TEN QUESTIONS
Q Who is or was your mentor?
A It would require an Oscar-type speech to list them all. Peter Holmes, former chairman at Shell, is one. We first met in Nigeria in the 1970s. He taught me a lot about managing governmental relations for a global company. More recently, Dick Giordano, who was the senior independent director when I arrived here at Rio Tinto. He’s an individual of huge experience who really helped me in understanding what chairing a global company is all about.
Q Which businessman or woman do you most admire?
A It’s difficult to pick an individual but certainly Dick Giordano for his strategic vision. At BG Group he was responsible for one of the great value creation stories of modern times. I would also say Willie Purves, who was chairman of HSBC. He was really the person who took HSBC from a localised Asian bank to a major force in global banking.
Q Do you read books on management? If so, which has influenced you the most?
A I tend not to but I am a member of the board of Insead business school in France and Singapore so I try to follow the work that the faculty of the school publish. The book that’s impressed me the most in the last year is Blue Ocean Strategy by W. Chan Kim and Renée Mauborgne, which is a tremendous framework for thinking about developing strategy and strong competitive positions.
Q Which is more important: what you know or who you know, and why?
A What you know is more important. What you know is having a very clear theory of the business that you are in and what drives value in that business. The era of who you know, defined in terms of someone who can do you a favour, is long gone. But who you know in terms of a network of people who can be helpful advisers can be hugely powerful support.
Q What does leadership mean to you?
A Creating a winning vision and then inspiring people at all levels in the business to understand and deliver it. But the really important word is winning. My experience over many years is that people love to work for a winner, which means being the best in your business.
Q If you could change one thing about the business, financial and commercial environment, what would it be?
A I’m a great believer in free and fair trade. If I could choose one thing to change it would be something that would really help deliver the Doha development agenda. That would require a major restructuring of the agricultural subsidies that seem so embedded in the US, Europe and Japan.
Q What is the most important business event, good or bad, to occur in your working life?
A The oil supply upheaval in 1978-79, after the Iranian revolution. At that time I was responsible for Shell’s crude oil supply from the Middle East. Oil was in short supply and I spent two to three years running around the Middle East trying to ensure that Shell was adequately supplied.
Q Does money motivate you?
A It’s nice to have enough money to do the things that you enjoy doing in life but wealth accumulation comes trailing behind good health and family life.
Q What gadget/piece of technology can you not do without?
A I try to look at everything that comes along but in the last few years the words BlackBerry and iPod have begun to feature in my life.
Q How do you relax?
A Skiing and outdoor sports. I have only done three hours this year but I have more planned. Listening to opera on my iPod and reading. I’ve just finished a biography of Mao Tse Tung. read more

By Charles Pym in Lagos
(Filed: 20/02/2006)
A Briton was among nine oil workers kidnapped in Nigeria at the weekend in a series of attacks that threatens to destabilise the lucrative industry.
Shell shut down more than one-fifth of Nigeria's oil exports – stoking fears of a rise in fuel prices – after a team of its contractors were kidnapped by militiamen who also blew up petroleum pipelines and an oil platform. Mend is demanding US$1.5bn in environmental compensation from Shell for gas flaring and oil leak.
The team – one Briton, three Americans, two Egyptians, two Thais and a Filipino – were abducted from a ship by dozens of gunmen from a group called the Movement for the Emancipation of the Niger Delta (Mend) in a pre-dawn raid on Saturday.
The Foreign Office said the kidnapped Briton was John Hudspith, from the south of England. No further details were given.
The kidnappers said last night that they would decide the fate of their hostages “in the next few days”.
In an e-mailed response to rumours that they planned to execute the captives Mend said: “They are being moved around with our units and may likely only be killed in a crossfire [with government forces].”
Mend is demanding the release of two jailed leaders of local secessionist militias and US$1.5 billion (almost £1 billion) in environmental compensation from Shell for gas flaring and oil leaks.
The militiamen fired rocket-propelled grenades at police guarding Shell's key Forcados export terminal, which handles 380,000 barrels per day, blowing up an oil platform and two pipelines.
Shell produces more than 2.4 million barrels per day and has in the past born the brunt of violent campaigns by ethnic Ijaw militias angry that desperately poor local communities lack basic health care while foreign companies make millions out of the delta's rich natural resources.
In 2003, an ethnic Ijaw revolt shut down 40 per cent of Nigeria's crude production, much of which remains cut off. Some of the same individuals are behind the current wave of violence and this time they are better armed and even more militant.
More attacks “will take place on a grander scale”, the group said in an e-mail to journalists that warned Shell it would “pay a terrible price” for allowing one of its airstrips to be used by the Nigerian air force as a launch pad for attacks on Ijaw villages.
Kidnappings of foreign oil workers have increased since two figureheads of the Ijaw group were arrested as part of a crackdown on secessionist violence and corruption. One was the delta's most prominent militia leader, pro-secessionist Mujahid Dokubo Asari, who was arrested in September on treason charges.
Last week, Nigerian air force helicopters attacked militia strongholds. The military said the operation successfully destroyed barges involved in “oil bunkering”, a phrase that in Nigeria means stealing oil by tapping into pipelines.
Local residents told a different story, saying helicopters fired rockets at their villages. read more

· Leadership wins crucial vote on policing board
· Adams warns dissident republican groups
Owen Bowcott in Dublin
Monday February 20, 2006
Sinn Féin signalled yesterday that it was closer to joining Northern Ireland's policing board when hardline proposals to reject a deal were defeated at its annual conference.
The vote on one of the most sensitive political issues facing the republican movement exposed tensions within the party over closer involvement with a force that was its enemy throughout the Troubles.
The British government regards Sinn Féin's ability to overcome its distrust as necessary for the restoration of devolution. The party discussion came before a fresh round of political talks starting in Belfast today to revive the Stormont assembly. The prime minister had been due to attend, but Downing Street cancelled the trip, a sign that it recognised further groundwork was required.
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In Sinn Féin's policing debate one motion – which was lost – had opposed the party joining the policing board until “a timetable for British withdrawal” had been agreed. “Republicans should not be enforcing the armed wing of British rule in this country,” said a delegate.
Gerry Kelly, on the party executive, condemned the decision to hand over to MI5 responsibility for national security in Northern Ireland, including threats from republicans.
“The police force has been a partisan, political, protestant and paramilitary force,” he said. “Republicans will not be badgered or forced into accepting less than the new beginning to policing promised in the Good Friday agreement.”
Party leaders won the vote to delay a decision on the issue until a special delegate conference. Last week the government published a Northern Ireland bill which proposes devolving policing and justice to a new assembly.
Around 1,000 delegates were at the party's first conference since the IRA announced it had destroyed its weapons. The only recently released prisoner to win a standing ovation was Michael O'Seighin, a community activist jailed for preventing the oil company Shell building a pipeline across his land in County Mayo.
The Sinn Féin president, Gerry Adams, reminded republicans there was no going back to violence. “The decisions by the IRA were undoubtedly deeply difficult for many,” he said. “There are republicans still trying to come to terms with it many months later.
“Indeed, there are some who believe that the IRA has made a mistake. They are entitled to their opinion but to no more than that. No one should harbour the notion that the republican struggle can be advanced any further by armed campaign. The leadership is firmly opposed to such a departure.”
He warned dissident republican groups to “look objectively at the political situation” and “carefully consider your options”.
The conference was focused, however, on the electoral advances the party is confident of making at the next Irish general election. Sinn Féin holds five seats – mainly won since the IRA's ceasefire – in the Dáil, the republic's parliament.
Ireland's system of proportional representation could put Sinn Féin in a future coalition government. “Kingmakers” was the headline in one newspaper, accompanying a picture of Gerry Adams and the party chairman, Mitchel McLaughlin.
Several motions from branches in the republic attempted to rule out deals with “rightwing parties” or a Fianna Fáil-led government. But the party's chief negotiator, Martin McGuinness MP, warned against tying the leadership's hand before a campaign.
“I have the advantage of having been in coalition,” he said, “with unionists [in the power-sharing executive at Stormont]. As minister of education I abolished the 11-plus exam. The future of our children would have been pretty dismal without that reform.”
Attempts to block deals with specific parties were defeated, although one motion, requiring Sinn Féin to “insist upon the repeal of the Offences Against the State Act as a condition to entering any coalition government” scraped through.
The decision by the Irish prime minister, Bertie Ahern, to deny elected representatives from Northern Ireland the right to speak in the Dáil was condemned by Mr Adams as “nothing less than bad faith”. read more

Rory Carroll , Africa correspondent
Monday February 20, 2006
Militants in the Niger delta threatened to escalate their campaign against oil exports yesterday by firing rockets at international tankers. The warning came a day after nine foreign oil workers were abducted in a series of raids which forced the closure of an oil platform and halted the flow of at least 500,000 barrels of crude.
A leader of the Movement for the Emancipation of the Niger Delta, a group hostile to Nigeria's government and multinational oil corporations, told the Associated Press that tankers would be targeted. “We'll use our rockets on the ships to stop them from taking our oil,” said the man, who gave his name as Efie Alari.
Dozens of militants were involved in Saturday's attacks, which started with a pre-dawn raid on a barge on the Forcados estuary operated by Willbros, a Houston-based oil services company laying a pipeline for Royal Dutch Shell. Three Americans, two Egyptians, two Thais, one Briton and one Filipino were abducted. The Briton was named as John Hudspith.
Most previous abductions have ended with hostages being released unharmed within a few days or weeks. Recently the militants have hardened rhetoric against oil companies, accusing them of collaborating with a corrupt government.
In addition to closing the Forcados oil loading platform, which usually moves out 400,000 barrels a day, Shell evacuated an oil platform off the Atlantic coast, shutting off an additional 115,000 barrels a day.
The militants' spokesman said the attacks were retaliation for assaults last week by Nigerian army helicopters.
The president, Olusegun Obasanjo, held an emergency meeting with security chiefs and Shell executives. read more

By REUTERS
Published: February 20, 2006
Filed at 2:35 a.m. ET
LAGOS (Reuters) – Nigerian militants said they blew up a military houseboat and an oil pipeline on Monday, extending a campaign of sabotage in the world's eighth largest exporter which has already cut supplies by a fifth.

The militants, who are holding nine foreign hostages, vowed to prevent Royal Dutch Shell from using the damaged Forcados export loading platform, which accounts for 15 percent of Nigerian output, and threatened an even more devastating series of attacks on the whole region.
“Patrol units … carried out attacks on one houseboat belonging to the Nigerian army and the Shell Ughelli Odidi-Escravos manifold. Both were destroyed with explosives,'' the militants said in an e-mail, adding that the soldiers in the houseboat fled before it was destroyed.
It was not immediately possible to confirm the information independently, but the militants have provided accurate details of their attacks in the past.
Royal Dutch Shell said it had suspended 455,000 barrels a day of oil production, 19 percent of the OPEC member's output, after a series of pre-dawn raids on installations in Delta state, in the western side of the vast river delta, on Saturday.
“We are going to continue with the destruction of oil facilities in Delta state while concluding arrangements for our wider attacks on the entire region,'' the militants said.
Shell said it closed 340,000 barrels a day of production from fields feeding its Forcados tanker platform, which was bombed on Saturday, and it shut another 115,000 barrels daily by closing the offshore EA field as a precaution.
The Forcados closure includes 106,000 barrels a day from a pipeline which has been shut since an earlier attack in January.
North Sea Brent crude oil futures rose $1.26 to $61.15 a barrel on Monday morning.
HOSTAGES
The militants snatched the hostages — three Americans, a Briton, two Egyptians, two Thais and one Filipino — from a barge operated by U.S. services company Willbros.
The campaign of violence mirrors attacks in December and January which hit 10 percent of Nigerian exports at one point and saw four oil workers kidnapped for 19 days.
The militants said that Shell was planning to use one manifold on the Forcados loading platform, which was not damaged in Saturday's attack, to export oil.
“Regardless of whatever security arrangements they depend on and time of the day, we will attack this vessel and execute everyone on board. It is needless to say what will happen to the surviving manifold in the next few hours,'' they said.
The government says the militant movement is a cover for thieves siphoning crude oil on a commercial scale from pipelines across the vast wetlands region of southern Nigeria.
The militants accused Nigerian military and security commanders in the area of being responsible for the theft.
“Oil is not like diamonds and requires ships to come in unhindered. This is facilitated by the heads of these security organisations who are paid a standard fee for every vessel loaded,'' they said.
The militants have demanded the release of two ethnic Ijaw leaders — an impeached state governor on trial for money laundering and a militia leader charged with treason — and more local control over the Niger Delta's vast oil resources.
Analysts at Eurasia Group said the markets should expect a prolonged period of disruptions in Nigeria this year, as tension between rival factions of the ruling party mounts toward elections in early 2007.
“The security situation in the Niger Delta will remain largely unstable for the rest of the year, with intermittent attacks, regularly disrupting about 10 to 20 percent of Nigerian crude production,'' they said in a report on Sunday.
The situation could get even worse if President Olusegun Obasanjo tries to run for a third — and unconstitutional — third term, or if one of the two imprisoned Ijaw leaders is sentenced to death or dies in custody, they added. read more

Feb 20, 2006
MAYO Co Council has issued an assurance that preparatory works on the site for the Corrib gas terminal have not affected the quality of the water source for thousands of homes in the Erris area.
Concern had been expressed to the authority about the level of aluminium in Carrowmore Lake, which is situated only a few miles from the proposed terminal site at Bellanaboy.
Mayo county manager Des Mahon stressed that the council, in consultation with the North West Regional Fisheries Board, was monitoring the quality of water discharging from the terminal site and the quality of water in the lake.
Shell E&P Ireland had constructed a dedicated treatment unit. But this unit had not been functioning satisfactorily since Christmas. Mr Mahon said the developer had promised to rectify this urgently.
However, samples of treated water were tested daily by the council and they conform to EU limits.
“Mayo County Council wishes to assure the public in the Erris region that their water supply is up to the required standard. The public will be advised of any changes in the situation.” read more

Feb 20, 2006
*******************************************
A PROFILE OF JAPAN'S PETROLEUM INDUSTRY
PREPARED BY ASIA PULSE ANALYSTS (FEB 2006)
*******************************************
OVERVIEW:
Soaring oil and natural gas prices have inflated energy companies' net profits to a record level both in the global and domestic fronts.
For the year ended December, Exxon Mobil Corp., the world's largest publicly traded oil company, racked up net profit worth US$36.13 billion – an all-time record for any publicly-traded company – or some 4.26 trillion yen, up 42.6 per cent year-on-year. This is followed by a 36.5 per cent surge in net profit to US$25.31 billion at Royal Dutch Sell Plc and a 30.8 per cent jump to US$22.34 billion at BP Plc.
Japanese oil refiners also enjoyed a substantial rise in profit under ever climbing product prices.
Japan's largest Nippon Oil Corp. has lifted its group pretax profit projection for the year through March by 70 billion yen (US$592 million) to 300 billion yen, up 41 per cent from a year earlier.
Cosmo Oil Co. has also raised its group pretax profit forecast by 24 billion yen to 117 billion yen, an 85.2 per cent increase from the preceding year. Cosmo's net profit prediction has been revised upward by 16 billion yen to 60 billion yen, a 130 per cent rise from fiscal 2004.
But over half of this substantial increase in profits at these Japanese oil companies is attributable to the weighted average inventory valuation method, which tends to overestimate the value of ending inventories thus underestimating cost of goods sold, and overestimating profit at the time of fast product price increases.
In the case of Nippon Oil, its ending inventory valuation method is estimated to have inflated group pretax profit by as much as 155.5 billion yen. If the accounting bias in inventory valuation were removed, group pretax profit would be 145 billion yen, which is smaller than that of the previous year's 151.7 billion yen.
The overestimated ending inventories, however, will become the overvalued beginning inventories in fiscal 2006, which will lead to a greater cost of goods sold and the underestimation of profit, as the rise in crude oil prices seems to have passed its peak. In fact, Nippon Oil forecasts its fiscal 2006 pretax profit to drop 50 per cent from the projected fiscal 2005 level to around 150 billion yen. Cosmo Oil also anticipates a profit decline of 30 per cent.
OUTLOOK:
The vulnerability in earnings capability of Japan's oil companies has been blamed on the fact that their operations are not vertically integrated. Most of these firms buy crude oil from the oil field development firms, trading companies or major global players and sell refined products to their affiliated retailers.
Some Japanese oil companies explore and develop overseas oil fields, but their exploration capability and financial strength to take risks involved in the oil field development projects are still limited.
Unlike these Japanese firms, Exxon Mobil, Royal Dutch Shell, BP and Total S.A. are fully integrated concerns with operations that encompass oil field exploration, development, transportation, refining, production of petrochemical products and marketing of these products.
An answer to more stable managerial basis and greater risk taking capability for Japanese oil companies is an industry-wide restructuring. Even the giant oil firms of the U.S. and Europe are survivors of numerous mergers and acquisitions (M&As).
The August 1998, the takeover of American Oil Company (Amoco) by British Petroleum as well as the November 1999 merger of Exxon Corp. and Mobil Corp. altered the landscape of the global oil industry.
Back in November 2005, Japan's largest oil development firm Inpex Corp. and the third largest Teikoku Oil Co. signed a merger agreement for the unification of their operations in April.
Like other oil companies, Inpex has reported a record pretax profit of 180.5 billion yen for the fist half of fiscal 2005 through September, a 63 per cent increase owing to high oil prices. The company's merger with Teikoku will bring its annual revenue to 650 billion yen. But still the annual revenue of the unified entity is only about 2 per cent that of Exxon Mobil.
With most of the existing large oil fields staying in the hands of the major global players, Japanese oil concerns such as Inpex have no choice but to explore new fields in Africa, Latin America and central Asia, but the exploration costs are soaring because of increasing geopolitical risks and environmental concerns.
Furthermore, energy thirsty emerging economies such as China and India are eager to outbid their competitors for securing new oil fields overseas.
********************* Date Price ********************* July 2001 100 yen July 2002 100 yen July 2003 101 yen July 2004 114 yen July 2005 125 yen Jan 2006 128 yen *********************
The Inpex-Teikoku merger, therefore, should be seen as a first step toward the industry-wide restructuring, through which a fully integrated oil firm that can withstand the toughing international competition against big players should emerge.
KEY INDICATORS:
*********************************************************** Company Sales Operating Net Profit Profit *********************************************************** Nippon Oil 2,701.03(19.6%) 145.48(61.3%) 81.88(41.2%) Idemitsu 1,484.5 (10.3%) 29.3 (6.2%) 44.4 (–) Kosan Cosmo Oil 1,203.20(21.4%) 50.68(132.5%) 29.56(614.3%) Showa Shell 1,059.58(20.7%) 50.25(132.5%) 28.61(136.8%) Sekiu ***********************************************************
Average retail price of regular gasoline in Japan (per liter)
MAJOR PLAYERS:
Group half-year earnings for FY2005 (billions of yen)
Note: Figures in parentheses show year-on-year change.
Japan Energy Corp. is now part of the Nippon Mining Holdings Inc. group and no consolidated earnings figures comparable with other refiners are available.
CONTACTS:
Nippon Oil Corp.
1-3-12 Nishi-Shinbashi
Minato-ku, Tokyo 105-8412
Tel: 03-3502-1131
Idemitsu Kosan Co.
3-1-1 Marunouchi
Chiyoda-ku, Tokyo 100-0005
Tel: 03-3212-3114
Japan Energy Corp.
2-10-1 Toranomon
Minato-ku, Tokyo 105-8407
Tel: 03-5573-6085
Cosmo Oil Co.
1-1-1
Shibaura
Minato-ku, Tokyo 105-8528
Tel: 03-3798-3211
Showa Shell Sekiyu KK
2-3-2 Daiba
Minato-ku, Tokyo 104-8581
Tel:03-5531-5591
Oil Information Center Japan
1-13-1 Kachidoki
Chiyoda-ku, Tokyo 104-8581
Tel: 03-3534-7411
(Nikkei) read more

promoting the projects, Mitsui and Mitsubishi are also
Feb 20, 2006
TOKYO, Feb 20 Asia Pulse – Japanese firms Mitsui & Co. (TSE:8031) and Mitsubishi Corp. (TSE:8058) have launched a joint feasibility study on natural gas-based projects, such as petrochemical production and power generation, on the Russian island of Sakhalin, it has been learned.
Currently on the drawing board are plans to build a factory to produce ammonia and methanol from natural gas pumped off the island. The local government has already presented the companies three possible factory sites.
The parties involved also envision a project to use natural gas instead of coal as the island's major fuel for generating power.
Late last year, the companies sent a group of delegates to Sakhalin for an initial survey. The local government asked them to present a report on the feasibility study by the end of this year.
These projects are part of industrial promotion measures agreed upon last year between the two firms and the Sakhalin government.
Seeking to help ensure that the huge “Sakhalin 2” plan to export liquefied natural gas to Japan and South Korea, which also involves Royal Dutch/Shell Group, goes smoothly.
(Nikkei) read more

OSMOND CHIDI
Feb 20, 2006

Militants who kidnapped nine foreign oil workers and forced a 20 percent cut in Nigerian crude exports have vowed to escalate the violence, threatening for the first time to fire rockets at international oil tankers. The military said tankers in Nigerian waters were safe.
The West African nation is reeling from a spate of attacks a day earlier in which militants blasted oil and gas pipelines and sabotaged a key oil loading terminal belonging to Royal Dutch Shell, forcing the company to halt the flow of more than 500,000 barrels a day.
Efie Alari, a self-declared commander of the Movement for the Emancipation of the Niger Delta, told The Associated Press by telephone Sunday that his group was poised to attack foreign crude oil tankers offshore.
“We'll use our rockets on the ships to stop them from taking our oil,” Alari said. His identity could not be independently verified, but the call came from a number used by the group before.
The military said it would do whatever necessary to ensure tankers remain safe in Nigerian waters.
“I don't know their capabilities, but we're not leaving anything to chance,” Maj. Said Hammed, spokesman of the military task force in the Niger Delta, said of militant forces. “The assurance has been given at the highest level of government that oil tankers are safe in Nigerian waters. That assurance remains.”
Violence and sabotage of oil operations have been common in the oil-rich Niger Delta for the past 15 years amid demands by the region's impoverished communities for a greater share of the oil revenue flowing from their land.
The militants, who say they are fighting for the same cause and the freedom of imprisoned ethnic Ijaw leaders, launched a series of pre-dawn attacks Saturday that shook the nation's volatile oil industry.
In one assault in the swampy delta's Forcados estuary, dozens of armed militants seized nine foreigners after storming a barge belonging to the Houston-based oil services company Willbros, which was laying pipeline for Shell.
The hostages include three Americans, two Egyptians, two Thais, one Briton and one Filipino, militants and Willbros officials said.
Responding to local rumors they planned to execute the hostages, militants said in an e-mail to AP they had not decided what to do with them.
Nigeria is Africa's leading oil exporter and the United States' fifth-largest supplier, usually exporting 2.5 million barrels daily.
Hostage takings are also a common occurrence in the volatile delta, but most are released unharmed. Last month, militants held four foreigners for 19 days before releasing them unscathed.
Associated Press writer Dulue Mbachu in Lagos, Nigeria contributed to this report. read more

By Alan Caruba
web posted February 20, 2006
There’s a new book, A Thousand Barrels A Second by Peter Tertazkian, that paints a very scary scenario about the oil industry and energy options in the future. When I read such books or the daily headlines in newspapers or in news magazines, I keep reminding myself that bad news sells.
Tertazkian’s book is actually quite interesting and appears to have been well researched from open sources. The author is the chief energy economist and director at ARC Financial Corporation, identified as “one of the world’s leading energy investment firms.” His book is devoted to the concept of “peak oil”, that indeterminate day when the world’s known reserves of oil begin to decrease and the view that there will be few others to replace them.
That is a fallacy. On at least five occasions in the past, the world has been informed that it was running out of oil. Tartazkian’s book asserts that, “We’re on the verge of a tipping point in oil…a break point.” However, the author does say, “”We’re not running out of oil, but the oil we need is getting harder to find.” This is true.
A case in point is a new field near Sakhalin, a remote island off Russia’s east coast. American, Japanese, Indian, and Russian oil companies funded the project which now taps a field that will yield some 250,000 barrels of oil a day by the end of this year along with some 60 million cubic feet of natural gas. Additional fields in the pipeline include Chayvo, Odoptu, and Akutun-Dagli. Overall, more than five billion oil-equivalent barrels of energy are anticipated.
Here’s what most people still don’t understand. It took some ten years to make this happen and involved “slant-drilling” for 20 miles to tap the Sakhalin field. This is an extraordinary technological achievement and a very expensive one. If we began today to drill in Alaska’s ANWR, it would take about the same time frame before Americans could benefit from their own oil. So far, the U.S. Congress has managed to stymie this effort for decades!
Civilization has gone through various stages of dependency on different forms of energy. Domesticating animals like oxen and horses was the first breakthrough. People burned wood for a very long time, then coal. The British Empire was built on the availability of coal. They were, for a relatively short time, “energy independent.” Then in 1859 came oil. Middle Eastern oil discoveries in the early part of the last century transformed whole economies and launched an effort by Western nations to secure control of it.
The President, in his State of the Union speech, said America was “addicted to oil” and urged that we undertake more research to achieve “energy independence.” What he didn’t mention is that America imports oil from sixty different nations, not just the Middle East. His solutions, too, left me less than thrilled. Can you imagine how many acres of land we’d have to plant to produce enough corn to make ethanol as a gasoline additive? This is a boon to farmers, but does little to address the need for oil.
It is true that Americans and the West send billions of dollars to the Middle East, enriching a few despotic governments who use that money to finance a global jihad. Getting control over a crazed and volatile Middle East might account for why U.S. troops are in Iraq. If you want to gas up your car, you might want to think about the benefits of having some influence over a nation with the second largest reserves of oil in the region.
The concept of “peak oil” has been around since the 1950s when it was first proposed by a Shell Oil geologist. New oil fields have been found since then and the effort to find others continues in order to meet the anticipated world demand of 120 million barrels per day in 2025.
As noted, bad news sells. Americans need to keep in mind that (1) all the oil that exists around the planet has not been found, (2) that new technologies will make its extraction possible, and (3) will greatly improve the use of what exists. Our national energy concern should be focused on oil in terms of the essential role it plays in transportation. Failure to keep our cars and trucks on the road would imperil our economy. Ultimately, all goods move on wheels.
The world is filled with some really unpleasant people; some of them are in charge of nations like Iran, Venezuela, and Nigeria, where the government controls production. However, the minute they stop exporting to us and other nations, they are in big trouble. They need us as much as we need them. And governments change.
The largest supplier of oil to the United States is none other than Canada. The discovery and development of oil-tar fields has enabled this. While the U.S. is home to vast shale-oil reserves, the cost of its development and extraction is still too high for the large oil companies to contemplate. That day, however, is coming and, when it does, trillions of barrels of oil trapped in that rock will continue to fuel our energy needs.
It doesn’t help when President George W. Bush, an oilman and son of an oilman, says during his State of the Union speech that America is “addicted to oil.” We are not addicted, but we are dependent. So is the rest of the world. And, remember, it’s an election year. The President’s advisors study the polls.
James K. Glassman, writing for Tech Central Daily on February 2 called the President’s statement “dangerous.” I agree. Telling Americans that solar or wind technologies can take up the slack in our need for energy is nonsense. These heavily subsidized technologies represent about one percent of all the energy we use. That’s because they are astonishingly ineffective.
Telling Americans we can “conserve” our way out of our dependency on oil is absurd. The President’s suggestion that hydrogen will magically become an energy source has no basis whatever in reality and is little more than a cruel hoax. Hydrogen is not an energy source; it is an energy carrier, and a very costly one at that. It may, at some point, however, become useful for hybrid car production on a larger scale, thus reducing the use of gasoline as their only fuel source.
The scary news purveyors are having a field day. In the March edition of The American Enterprise magazine, Robert Zubrin says that the only way to “liberate ourselves from the threat of foreign economic domination, undercut the financiers of terror, and give ourselves the free hand to deal with Middle Eastern extremists” is to devalue their oil resources. “We can do this by taking the world off the petroleum standard and putting it on an alcohol standard.” An essential step says Zubrin is to “simply pass a law stating that all new cars sold in the U.S.A. must be flexible-fuel vehicles capable of burning any combination of gasoline and alcohol” in the form of either ethanol or methanol.”
Ethanol is made from agricultural products. They have to be grown somewhere in the world and are subject to all kinds of problems such as drought, grasshoppers, weeds, and plant diseases. Methanol can also be made from biomass, as well as from natural gas or coal. This is the kind of beguiling notion that sounds great on paper but doesn’t work in the real world.
Whoever becomes the next President of the United States is going to have to make some major decisions to insure that this nation remains the superpower it is, economically and militarily. Insuring that America has enough energy for the foreseeable future, however, is going to be the single, most important decision of all.
Alan Caruba writes a weekly column, “Warning Signs”, posted on the Internet site of The National Anxiety Center. © 2006, Alan Caruba read more

TOKYO — Mitsubishi and Mitsui have begun feasibility studies on gas projects at Sakhalin Island, the Nihon Keizai newspaper said.
The study includes three possible sites for production facilities for ammonia and methanol from natural gas pumped off the island, the newspaper reported, without saying where it got the information.
Mitsui and Mitsubishi seek to ensure their role in developing the Royal Dutch Shell-led, $20 billion Sakhalin-2 oil and liquefied natural gas project. Mitsui had a 25 percent stake and Mitsubishi owned 20 percent of the Sakhalin Energy project. (Bloomberg) read more

By Dino Mahtani in Lagos and Carola Hoyos in London
Published: February 19 2006
Nigerian militants on Sunday threatened to extend their disruption of the country’s oil industry to attacks on oil tankers, after violence and abductions at the weekend led to the closure of an entire oilfield and forced Royal Dutch Shell to abandon loadings at one of its export terminals.
Militant attacks, including the kidnapping of nine oil workers on Saturday, have led to a 25 per cent cut in oil exports from the world’s eighth biggest crude exporter, a reduction likely to put upward pressure on prices when markets reopen today.
Though 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 next 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.
Inventories in the US are swelling and in the past week Opec members Venezuela and Qatar have suggested the market is oversupplied.
Nigerian militant groups said they had destroyed the loading facility at the Forcados export terminal in attacks over the weekend. Shell said it was assessing the damage at Forcados, which produces 380,000 bpd, and had shut its nearby EA offshore field as a precautionary measure.
The militants have threatened to keep up the attacks, saying in an e-mail to Reuters, that they will extend them to oil tankers. A representative of the Movement for the Emancipation of the Niger Delta, the group claiming responsibility for the attacks, was quoted as saying: “There is no shortage of things to destroy.” read more

By VIVIENNE WALT of Fortune Magazine
19 February 2006
China, the world’s second-largest energy consumer, now imports about 28% of its oil and gas from sub-Saharan Africa, compared with about 15% for the United States.
In the past few years, China’s leading energy companies – Sinopec, China National Petroleum, and CNOOC – have inked oil contracts from Equatorial Guinea to Algeria to Angola. Chinese President Hu Jintao’s African trips have included pocket-sized Gabon, whose 1.4m people could fit into a corner of Shanghai but which has more than 2bn barrels of oil reserves. When China’s Foreign Minister, Li Zhaoxing, toured the region in January, he spent several days in Nigeria.
“We haven’t been totally invaded by China yet, but it will come,” says Iheanyi Ohiaeri, head of business development for Nigeria’s National Petroleum. “I get calls and e-mails daily from Beijing, from people looking to buy oil.”
The calls are being answered, in part because African governments view China as a more co-operative partner than the West. China has refused to back regular Western rebukes of African corruption and human-rights abuses and last year used its permanent seat on the UN Security Council to block genocide charges against Sudan – source of about 7% of China’s oil – for the massacres in Darfur.
“The US will talk to you about governance, about efficiency, about security, about the environment,” says Mustafa Bello, head of the Nigerian Investment Promotion Commission, who has visited China seven times. “The Chinese just ask, “How do we procure this licence?’”
China has become the biggest foreign investor in Zimbabwe, where President Robert Mugabe’s policies have impoverished the country and left millions homeless. Zimbabwe doesn’t have oil, but it is the world’s second-largest exporter of platinum, a key import for China’s auto industry.
Chinese radio-jamming devices block Zimbabwe’s dissident broadcasts and Chinese workers built Mugabe’s new $9m (£5.2m, E7.6m) home, featuring a blue-tiled roof donated by the Chinese government. While Western politicians railed against Mugabe last year for flattening entire shanty towns, China was supplying him with fighter jets and troop carriers worth about $240m, in exchange for imports of gold and tobacco.
China has also agreed to sell armaments to Nigeria – $251m worth of Chinese fighter jets, financed by China’s Exim Bank – and satellite technology provided by defence contractor Norinco. “If China wanted to go out and develop Europe, it would be impossible,” says Dai Adi, a Chinese journalist in Lagos who moved from Beijing in 2001. “But here they can.”
The next hot spot may be Angola, where offshore oil could transform the country from one of Africa’s poorest to one of its richest. In late 2004, while International Monetary Fund officials were berating Angola for corrupt oil dealings, China gave the government $2bn in credit to repair railway tracks bombed in the country’s long civil war and to construct new office buildings in the capital – all using Chinese contractors. The timing was flawless: When French oil company Total applied to renew its licence on a large oil-production block, Angola refused, handing it instead to Sinopec, with which it then formed a joint venture to bid on other oilfields.
China faces its own challenges in Africa. Tony Chukweke, head of Nigeria’s department of petroleum resources, admits that he often finds it difficult to negotiate with Chinese companies, since each detail requires approval from officials in Beijing. “It is very, very slow,” he says. “They go back and forth. And when they come back, sometimes you find it is not what you agreed to.” Chukweke, who worked for years as a Shell geophysicist in London, prefers negotiating with Western oil companies: “Exxon comes in with clear mandates,” he says. “We can negotiate within those mandates.”
Still, China’s intense energy needs make it an alluring partner. Nigeria’s oil-business development manager Ohiaeri points out that his government can pressure China far more than it can western governments. “They are desperate for our resources,” he notes. That symbiotic relationship continues to grow, and with each passing day – and each new deal – China’s role in the region deepens. read more

Associated Press
WARRI, Nigeria — Militants launched a wave of attacks across Nigeria's oil-rich southern delta Saturday, blowing up oil installations and seizing nine foreign oil workers, including three Americans, officials said. A Royal Dutch Shell Plc official said the company was forced to shut down a facility that moves 400,000 barrels of oil a day — 16% of the West Africa nation's output.
About 40 militants overpowered military guards and seized the foreigners before dawn from a barge belonging to Willbros, a Houston-based oil services firm that was laying pipeline for Royal Dutch Shell, a Willbros official said. He spoke on condition of anonymity because he was not authorized to speak to the media.
The militants provided the names of the kidnapped workers — three Americans, two Egyptians, two Thais, one Briton and one Filipino — in an email Saturday to the Associated Press.
State Department spokesman Noel Clay said he had no information about the workers, including their identities. The British Foreign Office identified the kidnapped Briton as John Hudspith, of southern England. Officials of the other hostages' home countries either could not immediately be reached or did not provide confirmation.
Shell official Donald Boham said militants attacked the Forcados oil-loading platform in the western delta, which moves out 400,000 barrels of oil daily. Nigeria normally produces 2.5 million barrels of oil a day.
The Movement for the Emancipation of the Niger Delta said in the email that the attacks were a response to military helicopter assaults this week on ethnic minority communities in the region. The militants threatened more attacks would follow on “a grander scale.”
Oil prices Friday jumped more than $1 and settled near $60 a barrel on supply concerns sparked by the militant group's threat to wage war on foreign oil interests.
In apparently coordinated violence, militants attacked a tanker berth at Shell's Forcados export terminal and blew up a major Shell crude oil pipeline near a facility by the western delta's Chanomi Creek, Mr. Boham said. The militants said that they also damaged equipment linking the pipeline to several smaller lines.
Militants also claimed they had destroyed a state-run pipeline feeding natural gas from the delta's Escravos plant to the country's commercial capital, Lagos. That attack could not be independently confirmed.
The military said its helicopters on Wednesday and Friday targeted barges used by criminal gangs to steal crude oil from pipelines for sale, a thriving illegal trade that sometimes diverts up to 10% of the region's daily exports.
The militants say they are fighting for more autonomy, a greater share of oil wealth and compensation for environmental degradation for the impoverished region's estimated eight million Ijaw people. The area's largest tribe accuses the government and oil companies of cheating it of wealth produced on its land.
The group said the helicopter attacks this week were on minority communities and that militants would now target all helicopters in the delta, including civilian aircraft. The group has accused foreign oil companies of providing their helicopters and air strips for military operations. The group has claimed responsibility for attacking two pipelines and abducting four foreign oil workers, including an American, who were released last month after 19 days in captivity.
The militants Saturday reiterated warnings for foreign oil workers to leave the Niger Delta. “Expatriates must realize that they have been caught up in a war, and the Nigerian government can do nothing to guarantee the security of anyone,” the group said. “They are warned again to leave while the doors are still open.”
On Friday, Shell shut down an oil facility pumping 37,800 barrels of crude daily in Nigeria's southern oil-rich delta, following an unexplained blaze at a nearby oil well. read more

(Filed: 19/02/2006)

A British oil worker is reported to be among nine foreigners abducted by militants in southern Nigeria yesterday.
The Movement for the Emancipation of the Niger Delta claimed responsibility for kidnapping the workers, who were seized when 40 armed militants overpowered military guards on a boat near the oil port city of Warri.
Three Americans, two Egyptians, two Thais and a Filipino were also taken from the vessel, which belonged to the United States company, Wilbros. The British worker was named as John Hudspith, originally from northern England, and now living in the South-East.
The boat he was travelling in was contracted to Shell. A spokesman for the oil group confirmed that the barge was attacked in the Forcados estuary, but refused to say if the workers were employed by Shell or another company.
It is the latest in a series of kidnappings carried out by rebels demanding greater local control of oil wealth in the impoverished region. read more

By DAVID SCHARFENBERG
Published: February 19, 2006
TARRYTOWN
THE nation may be addicted to oil, as President Bush warned in his State of the Union address last month, but at least some American consumers seem willing to break the habit.
Numbers of Toyota Prius owners and other hybrid-vehicle enthusiasts are slowly weaning themselves off the crude. And a small sliver of drivers have gone cold turkey — swearing off gasoline altogether to fuel up on compressed natural gas, French fry grease and all manner of animal fats.
So there was considerable excitement here when General Motors recently announced plans to bring a slice of its own oil-busting experiment — a billion-dollar gamble on hydrogen-powered fuel cell vehicles — to this riverside village.
G.M. already operates pilot programs in suburban Washington and near Irvine, Calif. In Tarrytown, the company envisioned a third test market for the vehicles, which combine hydrogen and oxygen inside fuel cells to create electric current to propel the vehicle, emitting only water vapor and a little heat.
The plan was to bring a handful of futuristic prototypes to the company's 51-year-old training center on Route 9, build a small hydrogen fueling station at the plant and, perhaps most tantalizing, give a few local businesses and families a chance to try out the vehicles.
The buzz only grew when officials with Shell, G.M.'s partner in the fuel cell initiative, said they hoped to add a hydrogen pump and a visitors' center to an existing gasoline station on Central Park Avenue in Greenburgh.
But two weeks ago, Tarrytown officials opened a letter from G.M. announcing that it was dropping its hydrogen plans for the village. The company, it seemed, had run into an opposition more powerful than Honda, more intimidating than Toyota: the suburban mom.
The General Motors Training Center is next to the Jewish Community Center on the Hudson, a squat, boxy building overflowing with exercise equipment, musical classes and children. Visions of a hydrogen-fueled explosion did not sit well with parents at the center or with other residents in the area.
Proponents say that risk is minimal, and note that American industry has a strong safety record with hydrogen, a nontoxic, lighter-than-air element. With children in the picture, parents said, the experiment should go elsewhere. Besides, said Jackie Reich, a Jewish Community Center board member with a 2-year-old child in the day care program, “G.M.'s going to have a lot of space — a lot of empty factories.”
G.M., as Ms. Reich wryly suggested, is in the midst of a crisis. The company reported an $8.6 billion loss for 2005 and watched its market share slip to its lowest level since 1925. In November, executives said the company would cut 30,000 jobs and close all or part of 12 factories.
The company has pledged to find another test market in affluent Westchester for its fuel cell vehicles in its effort to build a commercially viable hydrogen-powered car sometime in the next 10 years. But Joseph J. Romm, a former Clinton administration official and author of “The Hype About Hydrogen” (Island Press, 2004), says an affordable fuel cell vehicle is decades away.
Among the hurdles, say Mr. Romm and other experts, are bringing down the cost of a vehicle that can cost $1 million or more to build, and increasing the range of a fuel cell car to the 300 miles consumers have come to expect. Then there is the “chicken or the egg” dilemma: automakers will have a hard time creating a market for fuel cell vehicles without a vast network of hydrogen fueling stations in place; but energy companies will be hesitant to build the necessary stations without an established market for the cars.
For now, Mr. Romm said, the hybrid, which combines a gas engine and an emissions-free electric motor, is the most viable alternative to the internal combustion engine. James P. Womack, an author and industry expert, shares some of Mr. Romm's skepticism about fuel cell technology but says G.M. has little choice but to look at alternatives to what is on the road now.
“Really, nobody has the answer,” Mr. Womack said. “There are a lot of people placing bets who have to place bets. The race is starting and you have to put your money down somewhere.”
But William L. Shepard Jr., field manager for G.M.'s fuel cell program, is bullish on fuel cell technology, which dates back 165 years and has been used by astronauts and bus drivers alike. He said G.M. has shrunk the cost of the vehicle considerably and will clear any remaining technical hurdles in the near future. The payoff, he said, could be enormous. “We're all wary about what's happening with the price of oil,” he said, “foreign petroleum dependency, on and on.”
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Under a March 2005 agreement, G.M. and the Department of Energy are pouring $44 million each into a demonstration project, with the automaker pledging to put 40 fuel cell vehicles on the road in New York, Washington, California and Michigan by 2009. The department also signed fuel cell development agreements with Ford, DaimlerChrysler and Hyundai as part of a broader, five-year, $1.2 billion hydrogen initiative announced by President Bush in his 2003 State of the Union address.
Shell already operates a hydrogen fueling station in Washington, which sells gaseous hydrogen and a liquid, cryogenically chilled version. Tim O'Leary, a spokesman for Shell Renewables & Hydrogen, said the Greenburgh station would offer only the gaseous form, stored at 5,000 pounds per square inch of pressure.
Mr. O'Leary said the company hopes to build one or two fueling stations between the Washington outfit and the Westchester station, starting what he called a “New England corridor.” But first, Shell needs to win support for an overhaul of the Greenburgh station, an unremarkable piece of property at the corner of Central Park Avenue and Clifton Road with two gas pumps and four drooping American flags out front.
So far, Shell is faring better than G.M. in its public relations battle. Environmentalists have been generally supportive, though they note that hydrogen production can create emissions that offset some of the benefits of clean-running fuel cell cars. Paul J. Feiner, the Greenburgh supervisor, says he is open to the hydrogen pump, as long as the neighbors' safety concerns are met. Mr. O'Leary said that a poll conducted by the company found area residents in favor of the idea by a four-to-one ratio.
The positive response is not exactly a surprise. Greenburgh has three small electric vehicles in its municipal fleet and plans to erect a series of solar panels at its town hall in the coming weeks. But hydrogen, however safe, can still spook a nervous neighbor.
The gas is odorless and tasteless and burns invisibly. And there is always the shadow of the hydrogen-fueled disaster that took place nearly 70 years ago, not so far from here. Robert Bernstein, a lawyer from the Edgemont section of town, said he could not help thinking of it when Shell's polling firm called to ask him about hydrogen some two months ago.
“'What's the first thing that came into my mind?' they said,” Mr. Bernstein recalled, “and I said, 'the Hindenburg, of course.' “ read more

Lynsey Addario for The New York TimesThe civil war in Sudan has forced many residents, like these who were helped by relief workers last October, to flee their villages.
By CARLA FRIED
Published: February 19, 2006
THE latest American initiatives to put pressure on the government of Sudan are centered many thousands of miles away from its capital, Khartoum. A handful of state legislatures in the United States have passed laws that bar their public pension funds from investing in companies with ties to Sudan, which has been accused of extensive human rights abuses in a long-running civil war.
The United States State Department has also labeled Sudan a state sponsor of terrorism.
While a 1997 executive order by President Bill Clinton bars American companies from conducting business in Sudan — except for a few technical exceptions, like a humanitarian mission — foreign businesses do not fall under that restriction. But in this age of global asset allocation, it is not uncommon for investors in the United States to have a link to Sudan through foreign stock holdings. Such foreign holdings would be the most affected by the recent state legislation.
The New Jersey Legislature passed a law in August that requires its public pension funds to divest itself of holdings in businesses that have equity stakes, including investments, facilities or employees, in Sudan. A similar law went into effect in Illinois last month, requiring its pension funds to be fully divested of any company with a Sudan tie by July. Oregon has also passed such a law for its public investment funds, while Louisiana has approved legislation that permits, but does not require, its public funds to shed investments linked to Sudan.
In December, the biggest public pension hammer, the California Public Employees Retirement Plan, or Calpers, took aim at three companies in which it has invested. The Calpers board voted 9 to 2 to call for the companies, ABB, Alcatel and Siemens, to cease business operations in Sudan.
A Calpers spokesman said that “our board believes that an engagement process with the companies is the best avenue if we are going to effect some change.” Last week, Calpers reported that the three companies would not sever their Sudan ties; Calpers is considering its next step.
Phil Angelides, the California state treasurer and a Calpers board member, says he is prepared to pursue divestment if those companies do not pull out of Sudan. “The U.S. government has told Americans to have no business in Sudan,” he said, “so why should California invest in companies that are supporting the regime?”
Spokesmen for the three companies say that leaving Sudan would do more harm than good. Ron Popper, a spokesman for ABB, for example, said the company had sought comment from many individuals and organizations within Sudan. “We have unanimously heard one message: do not withdraw because the country needs international investment,” Mr. Popper said.
The states have left it to their money managers to figure out who belongs on the divestment list. Money managers have relied on private research firms that scour publicly available documents, trade journals and news accounts, and that conduct independent research to compile databases of companies involved in Sudan. Among the firms providing this research are KLD Research and Analytics, Institutional Shareholder Services and the Conflict Securities Advisory Group.
For example, KLD started its Sudan Compliance Service last November. Noel Friedman, managing director of KLD, said that 124 companies were currently on its Sudan list, including eight American businesses that he declined to name.
The lists, however, are far from definitive. Some companies that appear on them declare that they do no business in Sudan, and for at least one, 3M, the involvement was described by the company as aiding the United Nations. A spokesman at 3M said the United Nations bought 3M's Scotchshield Ultra Safety and Security Film, used to protect windows.
Steven Schoenfeld, chief investment strategist for quantitative investments at Northern Trust, is responsible for determining the companies his firm will exclude from the six “Sudan free” index funds it has started for institutional clients, including the State of Illinois. More than $8 billion of Illinois pension money has already moved into the six portfolios.
Mr. Schoenfeld's goal is to track closely the performance of traditional indexes even after he has removed stocks with ties to Sudan. He says his fund that tracks the MSCI EAFE index, a popular benchmark for developed countries across Europe and Asia, as well as Australia, will pose his biggest challenge. He said that more than 25 companies, representing more than 9 percent of the index's market capitalization, could be booted from the fund.
Among the big names that could be dropped from the portfolio are Royal Dutch Shell, which represents more than 2 percent of the EAFE index; Total, the French energy giant, about 1.5 percent; Toyota, about 1 percent; and Siemens of Germany and Ericsson of Sweden, both about 0.5 percent.
The six Northern Trust funds are to complete Sudan divestment by the summer.
While Sudan has been in a two-decades-long civil war that has claimed thousands of lives through fighting and famine, the state initiatives picked up momentum after Colin L. Powell, then the secretary of state, said in late 2004 that the United States viewed violence in the Darfur region of western Sudan as genocide.
Agreement over the gravity of the situation in Sudan has not meant a united push for divestiture. It stalled in the Arizona Legislature and didn't get far in Maryland. William C. Thompson, the New York City comptroller, has identified 24 stocks in the city pension system's holdings in which the parent company has some operations in Sudan. A spokesman for Mr. Thompson said his preferred course — echoing the stance of Calpers and others — was discussion with those companies, not divestment.
Mutual funds that call themselves socially responsible routinely screen out companies that they regard as having poor records on humanitarian issues and thus have generally avoided investing in companies with Sudan ties. But Julie Gorte, director of social research at Calvert Investments, which specializes in socially responsible funds, says she can still appreciate the complexity of the issue.
“You have to ask yourself what your goal is with divestment,” she said. “What's there if the government falls? Is there a government there that will take over and be better? If the companies that pull out provide money, goods and services, is there an understanding that will make the people poorer in the short run?”
Before the states' recent push, there were other moves to exert pressure. In 2002, Talisman Energy of Canada decided to end its Sudan investment after American investors steeply discounted its stock. In 2000, many college endowments and public pension funds, including Calpers, did not participate in the initial public offering of PetroChina, a subsidiary of the China National Petroleum Company, because of PetroChina's involvement in oil extraction from Sudan.
THE nation's largest mutual fund companies have remained on the sidelines so far. A spokesman for Vanguard said it was “taking an 'analyze and see' approach before making any broad policy changes to either our internally or externally managed funds,” while a spokesman for Fidelity said the Sudan issue was not currently a concern.
The $9 million Bull Moose Growth fund, which calls itself a “terror free” fund, is an exception. The investment manager relies on a database, maintained by the Conflict Securities Advisory Group, that tracks public companies with business ties to countries designated as state sponsors of terrorism; about 450 companies are listed in Conflict Securities' global security risk monitor, including about 120 with ties to Sudan. The fund's gain of 12.8 percent in 2005 was more than double that of the Standard & Poor's 500-stock index. read more

By REUTERS
Published: February 19, 2006
LAGOS, Nigeria, Feb. 18 (Reuters) — Nigerian militants began a string of attacks on the country's oil industry on Saturday, abducting nine foreign workers, bombing a major tanker loading platform and sabotaging two pipelines.
Royal Dutch Shell suspended exports from the 380,000-barrel-a-day Forcados tanker terminal, and shut down the 115,000-barrel-a-day EA oilfield as a precaution. That cut 21 percent of the 2.4 million barrels of daily supply to world markets by Nigeria, the eighth-largest oil exporter. The Movement for the Emancipation of the Niger Delta said the attacks were a response to military air raids in Delta State earlier this week and would be followed by another wave of violence “on a grander scale.”
“These hostages are human shields,” the militants said, calling on all oil workers to leave the delta. “Subsequent attacks on other installations will be drastic as we have no intentions of taking hostages.”
The militants said they wanted more local control over the Niger Delta's vast oil wealth and the release of two ethnic Ijaw leaders, including a militia leader who is on trial for treason.
In military-style predawn raids, militants in speed boats stormed an offshore barge operated by the American oil services company Willbros and abducted nine workers — three Americans, one Briton, two Thais, two Egyptians and a Filipino.
The rebels caused an explosion and fire on the Forcados loading platform, which delivers crude oil through pipes to large buoys where tankers load. The fire was later extinguished.
They also blew up a major Shell crude oil pipeline nearby, and a natural gas pipeline operated by state-run Nigeria National Petroleum Corporation, militant and oil industry sources said.
Shell began to close oil fields feeding the Forcados terminal, as well as the offshore EA field. It had already cut 106,000 barrels a day of output from the Forcados area because of an attack in January.
On Saturday night, a militant source said soldiers in 14 boats with air cover had engaged the militants in a three-hour firefight. Another pipeline, carrying gasoline, exploded in the nearby Escravos area, a security source said.
The militants warned Shell not to try to repair the offshore loading platform.
The United States confirmed that three Americans were among the hostages and called for their unconditional release.
Militants said the attacks had focused on Delta State in response to air raids on Wednesday and Friday. Delta state is on the western side of the Niger Delta and accounts for about a quarter of Nigerian output.
They accused Shell of allowing the military to use an airstrip operated by the company to initiate its attacks, and threatened to attack any aircraft, including civilian planes, using it. The Osubi airport was closed as a precaution, a security source said.
The military said their aerial bombardment this week had been aimed at gangs stealing crude oil from pipelines. But community leaders said the targets were villages suspected of harbouring militants, who had staged a series of attacks on the oil industry in December and January.
Militancy in the delta, a vast region of mangrove swamps and creeks that accounts for almost all of Nigeria's output, is rooted in the extreme poverty of the majority who live there. read more

OSMOND CHIDI
Feb 19, 2006
Armed militants launched a wave of attacks across Nigeria's troubled southern delta region, blowing up oil installations and seizing nine foreigners in violence that cut crude exports in the West African nation by 20 percent. Royal Dutch Shell official Donald Boham said militants attacked the Forcados oil loading platform Saturday, forcing the company to shut down a facility that moves out 400,000 barrels of oil daily.
Shell also said in a statement it had evacuated its nearby shallow water EA field as a precautionary measure, shutting off another 115,000 barrels a day.
Nigeria is Africa's leading exporter, normally producing 2.5 million barrels of oil a day.
In an e-mail to The Associated Press, the militant Movement for the Emancipation of the Niger Delta claimed responsibility for the attacks as well as a raid in which militants abducted three Americans, two Egyptians, two Thais, one Briton and one Filipino.
The group, which claims to be fighting for a greater local share of the country's oil wealth, said the attacks were carried out in retaliation for military helicopter assaults in the area this week. The militants threatened more violence would follow on “a grander scale.”
A day earlier, oil prices jumped more than US$1 and settled near US$60 a barrel on supply concerns sparked by the group's threat to wage war on foreign oil interests. Nigeria is the fifth-biggest source of U.S. oil imports.
A similar wave of attacks and hostage takings in January cut exports by nearly 10 percent, or 221,000 barrels daily. About 106,000 of that lost output has yet to be restored because of a previous attack on a major pipeline supplying the Forcados terminal.
After Saturday's attack at Forcados, Boham said a fire at was quickly put out, but loading operations were suspended. “We can't load because there is some damage to the loading platform,” he said. There was no word on casualties.
Forcados serves as a berth for oil tankers and accounts for all oil the company loads in the western delta. Shell is the leading exporter in Nigeria, accounting for just under half of total exports.
The foreigners were seized before dawn by more than 40 militants who overpowered guards on a barge belonging to the U.S. company Wilbros, which was working on a contract to lay pipelines for Shell, a Wilbros official said on condition of anonymity because he was not authorized to speak to the media.
Boham said the incident occurred in the Forcados estuary near the oil port city of Warri.
Militants identified each of the foreigners by name. Britain's Foreign Office said the British man kidnapped was John Hudspith of southern England. U.S. State Department spokesman Noel Clay confirmed three American oil workers were among those taken hostage.
“We're working with the Nigerian government and talking with them about this,” Clay said. “We call for their unconditional release.”
In Houston, Texas, Wilbros' vice president of investor relations, Michael Collier, confirmed the nationalities of those seized.
Associated Press writers Dulue Mbachu in Lagos and Chris Duncan in Houston, Texas contributed to this report. read more

WARRI, Nigeria (AP) — Royal Dutch Shell is cutting back on oil production in Nigeria after a wave of attacks by militants across Nigeria's oil-rich southern delta. Three Americans were among nine foreign oil workers kidnapped.
Royal Dutch Shell says it is shutting down a facility that moves 400-thousand barrels of oil a day. That's 16 percent of the West African nation's output.
The foreigners were working on a barge belonging to a Houston-based oil services firm (Willbros) that was laying pipeline for Shell.
The Movement for the Emancipation of the Niger Delta says the attacks are a response to military helicopter assaults this week on ethnic minority communities in the region. The militants threatened more attacks would follow on “a grander scale.” read more

2006-02-19 08:18 GMT:
LAGOS (AFX) – Energy giant Shell has suspended loading at an export terminal which handles an average of 380,000 barrels per day following an attack by militants, a company spokesman said Saturday.
The company also said that, following an attack on its Forcados export terminal in southern Nigeria in which nine foreign workers were kidnapped and an oil loading platform set ablaze, it was halting production in its EA field.
This will lead to a loss in production of 115,000 thousand barrels of oil per day, the firm said. Shell is already losing 106,000 barrels per day due to the closure of four plants following similar attacks last month.
Meanwhile, it has suspended loading at Forcados terminal, which handles around 380,000 barrels per day — depending on the arrival of supertankers to load — and has a capacity of 4 mln barrels.
A Shell spokesman said that no tankers were due to arrive at the offshore crude loading platform until next week, and it was not yet known whether the damage to the facility could be quickly repaired.
The firm also confirmed that there had been an explosion on an oil pipeline leading into the terminal from the delta creeks.
Nigeria is Africa's largest oil exporter, producing a total of around 2.6 mln barrels per day, but the wells and flow stations of the Niger Delta are vulnerable to attack from pirates and separatist militants.
dc/jmy/mas read more

(Interfax News Agency Via Thomson Dialog NewsEdge)MOSCOW. Feb 17 (Interfax) – Participants in the Sakhalin-2 oil and gas project – Anglo-Dutch Royal Dutch Shell and Japan's Mitsui and Mitsubishi – are to meet with Russian gas giant OAO Gazprom on February 21, a source close to preparations for the meeting told Interfax.
The source said that on the same day a meeting is planned between management from Mitsubishi and Gazprom to discuss trade in liquefied natural gas.
Gazprom (RTS: GAZP) and Royal Dutch Shell, which owns a 55% stake in Sakhalin-2, agreed to exchange shares in Sakhalin-2 and theZapolyarnoye-Neocomian project which is being developed by the Russian company. As a result of the deal Gazprom will receive 25% plus one share in Sakhalin-2 and Shell – a 50% stake in the Zapolyarnoye-Neocomian project. However, after Shell announced an almost 100% increase in expenditure on the second stage of the project, Gazprom announced that this would lead to a reduction in the value of the Shell assets in the Sakhalin-2 project.
If it sells 25% plus one share in the project to Gazprom, Shell will retain less than 30%. The Japanese companies own a total of 45%. At the end of January this year they announced that they are discussing the possibility of selling part of their stake to Shell. Mitsubishi CFO Ichiro Mizuno said that the sale is connected with the planned deal between Shell and Gazprom, but he did not give any details.
Shell is not commenting on the possibility of increasing its stake in the project.
Gazprom plans to wind up talks on exchanging the assets by August 2006.
The Sakhalin-2 project involves the development of the Piltun- Astokhsky and Lunskoye fields off the Sakhalin coast. Total reserves of oil and gas at these deposits amount to 150 million tonnes and 500 billion cubic meters respectively. rd read more

Posted on Sunday, February 19 2006 00:16:49 PST by Intellpuke
Guerillas launched multiple attacks on oil facilities in the Niger Delta on Saturday, kidnapping nine foreign workers and forcing Shell to suspend exports from a major terminal.
Heavily-armed rebels stormed a pipeline laying barge working off the energy giant's 380,000-barrel-a-day Forcados terminal, abducted expatriate staff and set fire to an offshore platform used to load crude onto tankers.
The firm said that it had been forced to suspend exports from Forcados – which could cut Nigeria's supply of crude to the world market by 15 per cent – and confirmed that one of its pipelines had also been blown up.
Captain Obiara Medani, spokesman for the Nigerian navy, said there was an exchange of fire between government security forces and the militants.
In a statement, Shell said: “A barge belonging to an SPDC contractor in the Forcados Estuary was attacked this morning. We understand that nine expatriates have been taken hostage but are unable to make further comments.”
U.S. oil services contractor Willbros Group confirmed that nine employees, including three Americans, two Egyptians, two Thais and one Filipino, were kidnapped.
Willbros “has not, at this time, been contacted by the group which has claimed responsibility,” it said. The company said it had a crisis management team “working closely with the appropriate parties and authorities to seek an early and safe resolution of the situation.”
A U.S. State Department spokesman called for the “unconditional release” of the U.S. citizens.
The kidnappers said they also had abducted a Briton. The British Foreign Office confirmed that one of its nationals, John Hudspith, was among those kidnapped.
The kidnappers warned that they planned to step up their war on the oil industry in retaliation for government airstrikes.
The hostages were seized from a barge operated by their employer, at around 5 a.m. (0600 GMT).
“There was shooting on the barge and there have been some casualties. At the moment this appears to be a couple of navy personnel, one badly injured,” said an internal oil industry security report that was passed to the Agence France Presse. “Four speedboats attacked Forcados Crude Loading Platform and set it on fire,” the report said, adding “there is a large hole in the CLP export line”.
Nigeria's Information Minister Frank Nweke, speaking on behalf of President Olusegun Obasanjo, condemned the hostage taking and said that the government would seek to release the hostages through negotiation.
“There can be absolutely no justification for what amounts to a criminal attempt to prevent people from going about their lawful business … and create further room for some persons to criminally enrich themselves,” he said.
The crude loading platform which was attacked lies 20 kilometers (10 miles) offshore and is used to supply super-tankers with crude oil for export.

Shell said that the fire had been put out but that it was not clear when exports would resume. Following the attack, the firm evacuated its EA offshore field, slashing production by 115,000 barrels per day.
The militants quickly claimed responsibility for the attacks and kidnapping.
“These individuals and facilities were well guarded by a large number of soldiers who resisted for an embarrassingly short period before escaping to ensure their personal safeties,” the militants' statement said.
Saturday's attack followed a week in which the Nigerian military carried out two helicopter gunship strikes against barges used by the militants to smuggle crude stolen from illegally trapped pipelines to tankers lying offshore.
Last month, the same gang kidnapped four foreign oil workers and held them for 19 days, demanding that two ethnic Ijaw leaders be released from jail and that Shell pay US$1.5 billion to the tribe.
“Our demands have not changed,” the militants' statement said.
The hostages were eventually released unharmed, but in the meantime the group and its allies also attacked a number of oil facilities, killing at least 22 soldiers and police in two assaults, and blew up a major pipeline.
Shell's production was already down by 106,000 barrels per day when the latest violence broke out and the company has closed four of its oil flow stations in the western delta because of security fears.
The Niger Delta – a 70,000 square kilometer swathe of swampland and mangrove forest – is home to Africa's biggest oil industry and to the 14-million-strong Ijaw tribe, many of whom dream of independence.
Intellpuke: “I sincerely hope the hostages are released unharmed. And look for the price of oil to go up when the markets open on Monday. You can read this Agence France Presse article in context here.
http://freeinternetpress.com/modules.php?name=News&file=article&sid=5953 read more

(ShellNews.net comment: Jorma Ollila becomes non-executive Chairman of Royal Dutch Shell Plc on 1st June 2006)
webitpr writes ”

The individual who built Nokia into one of the world's best-known brands was honoured at the GSM Association's annual industry Awards ceremony in Barcelona. Nokia CEO Jorma Ollila accepted the GSM Association's Chairman's Award, given in recognition of his leadership skills in creating a world-leading mobile communications company.
3GSM World Congress, Barcelona, Spain, February 16, 2006 (XTVWorld.Com) — Presenting the Award, GSM Association chairman Craig Ehrlich said: “This Award is in recognition of the career of a man whose company’s achievements and growth have mirrored those of GSM – a vision of communications without borders whether those barriers are physical, national, economic or social.”
“Nokia is now one of the world’s best known brands – a household name that has come to signify quality, ingenuity – and credibility.”
Jorma Ollila joined Nokia in 1985. He became its CEO in 1992 as the first GSM networks launched commercial services in Europe, as Telstra became the first non-European signatory to the fledgling GSM community and as Vodafone and Telecom Finland signed the first roaming agreement.
Throughout the 1990s, under Jorma's leadership, Nokia led the industry in producing lightweight, affordable and fashionable handsets that turned mobile phones into mass-market products. As a result, the company became the world's biggest mobile phone maker in 1998 – a position it has held ever since.
Sponsored by Fortune magazine, The GSM Association Chairman’s Award was established in 1995 to recognise outstanding personal or company-wide contributions that spectacularly support the growth and vitality of the GSM mobile community.
Previous winners include Sir Christopher Gent, former Chief Executive of the Vodafone Group and Zhang Li Gui, former President of China Mobile; and companies such as NTTDoCoMo of Japan and Entel PCS of Chile.
Contact:
http://www.webitpr.com read more

Chevron Corp. said Feb. 13 that Raymond Wilcox, president of Chevron North America Exploration and Production Co., will retire effective March 31 to become president and chief executive officer of Chevron Phillips Chemical Co. LLC, a company owned equally by Chevron and ConocoPhillips.
Wilcox will be succeeded by Gary Luquette, currently managing director of the European strategic business unit of Chevron International Exploration and Production Co.
Wilcox, 59, joined Chevron as a design and construction engineer in 1968, and spent the early part of his career in a variety of onshore and offshore production activities in California and Louisiana, and was named to his current position in 2002.
Luquette, 50, joined Chevron in 1978 as a design and construction engineer in the Lafayette, La., exploration and production unit. He was named manager of enhanced oil recovery for P.T. Caltex Pacific Indonesia in 1993, returned to the United States to manage the San Joaquin Valley profit center in 1996 and was promoted to vice president of the San Joaquin Valley business unit in 1999. He was named to his current position, based in Aberdeen, Scotland, in 2003. read more

Beating oil: Canadian company making ethanol for 25 years, could be commercial with waste-to-energy plant using straw by 2009
Paul Elias
Associated Press Biotechnology Writer
The key to kicking what President Bush calls the nation’s oil addiction could very well lie in termite guts, canvas-eating jungle bugs and other microbes genetically engineered to spew enzymes that turn waste into fuel.
It may seem hard to believe that microscopic bugs usually viewed as destructive pests can be so productive. But scientists and several companies are working with the creatures to convert wood, corn stalks and other plant waste into sugars that are easily brewed into ethanol — essentially 199-proof moonshine that can be used to power automobiles.
Thanks to biotechnology breakthroughs, supporters of alternative energy sources say that after decades of unfulfilled promise and billions in government corn subsidies, energy companies may be able to produce ethanol easily and inexpensively.
“The process is like making grain alcohol, or brewing beer, but on a much bigger scale,” said Nathanael Greene, an analyst with the environmental nonprofit Natural Resources Defense Council. “The technologies are out there to do this, but we need to convince the public this is real and not just a science project.”
Concern ethanol plants using too much corn
Using microbes may even solve a growing dilemma over the current ethanol manufacturing process, which relies almost exclusively on corn kernels and yielded only 4 billion gallons of ethanol last year (compared to the 140 billion gallons of gasoline used in the U.S.). There’s growing concern throughout the Midwestern corn belt that the 95 U.S. ethanol plants are increasingly poaching corn meant for the dinner table or livestock feed.
The idea mentioned by Bush during his State of the Union speech — called “cellulosic ethanol” — skirts that problem because it makes fuel from farm waste such as straw, corn stalks and other inedible agricultural leftovers. Cellulose is the woody stuff found in branches and stems that makes plants hard.
Breaking cellulose into sugar to spin straw into ethanol has been studied for at least 50 years. But the technological hurdles and costs have been so daunting that most ethanol producers have relied on heavy government subsidies to squeeze fuel from corn.
Researchers are now exploring various ways to exploit microbes, the one-cell creatures that serve as the first link of life’s food chain. One company uses the microbe itself to make ethanol. Others are taking the genes that make the waste-to-fuel enzymes and splicing them into common bacteria. What’s more, a new breed of “synthetic biologists” are trying to produce the necessary enzymes by creating entirely new life forms through DNA.
Waste-to-energy technology
Bush’s endorsement of the waste-to-energy technology has renewed interest in actually supplanting fossil fuels as a dominant energy source — a goal long dismissed as pipe dream.
“We have been at this for 25 years and we had hoped to be in commercial production by now,” said Jeff Passmore, an executive vice president at ethanol-maker Iogen Inc. “What the president has done is — perhaps — put some wind in the sails.”
Ottawa-based Iogen is already producing ethanol by exploiting the destructive nature of the fungus Trichoderma reesei, which caused the “jungle rot” of tents and uniforms in the Pacific theater during World War II.
Through a genetic modification known as directed evolution, Iogen has souped up fungus microbes so they spew copious amounts of digestive enzymes to break down straw into sugars. From there, a simple fermentation — which brewers have been doing for centuries — turns sugar into alcohol.
Iogen opened a small, $40 million factory in 2004 to show it can produce cellulosic ethanol in commercial quantities. In the last two years, it has produced 65,000 gallons of ethanol that is blended with 85 percent gasoline to fuel about three dozen company and Canadian government vehicles. Oil giant Royal Dutch Shell PLC has invested $40 million for a 30 percent ownership stake in Iogen; Petro-Canada and the Canadian government are also investors.
Looking for financing for commercial-scale factory
Now the company is ready to build a $350 million, commercial-scale factory in Canada or Idaho Falls, Idaho, next year if it can secure financing — long one of the biggest stumbling blocks to bringing the stuff to gas pumps.
While conventional lenders are wary of investing in a new technology, the company is banking on winning a loan from the U.S. Department of Energy. Even under a best-case scenario, Passmore said Iogen won’t be producing commercial quantities until 2009.
Other significant hurdles include how to widely distribute the fuel; getting auto manufacturers to make engines that will use it; and persuading gas stations to install ethanol pumps. There’s hope that funding shortfalls and the remaining technological problems such as how to ship large amounts of ethanol will be overcome in the next few years.
Despite the challenges, Bush’s endorsement and advancements in the field have re-energized alternative energy types.
While no commercial interest has advanced as far as Iogen, other biotech companies are engineering bacteria to spit out similar sugar-converting enzymes, and academics are pursuing more far-out sources.
At the California Institute of Technology, Jared Leadbetter is mining the guts of termites for possible tools to turn wood chips into ethanol. Leadbetter said there are some 200 microbes that live in termite bellies that help the household pest convert wood to energy.
Those microbes or their genetic material can be used to produce ethanol-making enzymes. So scientists at the Energy Department’s Joint Genome Institute in Walnut Creek, Calif., are now sequencing the microbe genes in hopes of finding a key to ethanol production.
“We have this idea that microbes are pests,” said Leadbetter, who has been studying termite guts for 15 years. “But most microbes are beneficial.” read more

Canada’s five integrated oil companies — those who explore, produce, refine and market production — feasted off sky-high commodity prices last year and high refining margins, tallying C$9.56 billion in profits, up 34 percent from 2004.
Backed by such riches, Imperial Oil, Shell Canada, Husky Energy (all controlled by non-Canadian investors), along with Petro-Canada and Suncor Energy (both controlled by Canadians), are expected to make life tough for smaller E&P companies in the competition for drilling rigs and service equipment.
With operating costs estimated to have climbed 19 percent in Western Canada last year, the big players are better placed than their junior rivals to handle sharp rises in the upstream sector.
All five are also key operators in the oil sands sector, where they have major projects and expansions under way.
The profit breakdown shows: Imperial Oil C$2.6 billion (C$2.05 billion in 2004), Shell Canada C$2.01 billion (C$1.29 billion in 2004), Husky C$2 billion (C$1.01 billion in 2004), Petro-Canada C $1.79 billion (C$1.76 billion in 2004) and Suncor Energy C$1.25 billion (C$1.09 billion in 2004).
—Gary Park read more

Only WesternGeco has vessel availability for Alaska OCS work; PGS and Veritas land crews continue active programs
Alan Bailey
Interest in shooting seismic offshore Alaska is heating up. ConocoPhillips has announced plans to conduct seismic surveys in the Chukchi Sea and Petroleum News has already reported that Shell will shoot 3D seismic in the Beaufort Sea in the summer of 2006, using WesternGeco’s MV Gilavar.
Alaska newcomer Eni Petroleum has said it is thinking of partnering with Shell in the Beaufort survey.
In late January, the National Marine Fisheries Service told Petroleum News that Shell is in the process of applying for an Incidental Harassment Authorization for seismic work in the Beaufort and Chukchi seas, and that Kerr-McGee is talking about a seismic survey closer to shore in the Beaufort.
But with oil and natural gas prices maintaining high levels, marine seismic crews equipped for working in Arctic waters seem in short supply. And work in the Arctic waters of the Beaufort and Chukchi seas generally requires vessels with hulls that have been strengthened for ice conditions.
WesternGeco
WesternGeco, the only company that appears currently to have Arctic-equipped vessels available for the summer of 2006, is enthusiastic about returning to the Alaska outer continental shelf.
“Right now WesternGeco does have the resources. We do have vessel availability for working offshore Alaska,” Elaine Buck, the company’s marketing manager for North America, told Petroleum News on Feb. 14. “…We’re very committed to being back in Alaska with 3D marine acquisition … we will be in Alaska in 2006.”
WesternGeco sees the increasing interest in the Beaufort Sea and offshore Alaska, Buck said.
“We’ve noticed that there is an increase in activity going on. The interest is there,” Buck said. “We know that more and more of the super majors are coming back to re-evaluate Alaska offshore and onshore.”
And Buck said that her company enjoys an extensive history of working in the Beaufort Sea.
“Back in the ‘90s we were shooting multi-client data in the Beaufort Sea, so we do have vessels that are equipped for working in the (Arctic) marine environment,” she said.
PGS and Veritas
Two other companies consistently active in Alaska in recent years, PGS Geophysical and Veritas DGC, have marine divisions with vessels strengthened for Arctic work. But neither of these companies have boats available for this summer’s seismic survey season offshore Alaska.
PGS actually bid on a ConocoPhillips offshore Alaska job, but the boat that the company planned on using was assigned to another contract before any commitment to Alaska work, Larry Watt, PGS Onshore Inc.’s area manager for Alaska, told Petroleum News. PGS’s worldwide fleet of 12 streamer vessels includes some ice-strengthened boats, he said.
“We’ve worked every summer around the Sakhalin Islands but they’re all busy right now for this summer,” Watt said.
PGS also operates boats in areas such as the Gulf of Mexico, offshore Brazil and offshore Africa. If a boat became available for use offshore Alaska, it could take anywhere from two weeks to a month for the boat to sail to Alaska waters, Watt said.
Veritas, with a worldwide fleet of 10 vessels (including two under contract), is also fully booked at the moment.
“From the marine perspective our backlog in other areas of the world is such that we did not have any vessels available to meet the requirements for the (2006) summer activity (offshore Alaska),” Jerry Hastings, general manager for Veritas Land in Alaska, told Petroleum News Feb. 15.
Busy onshore
But both PGS and Veritas are active onshore in Alaska.
PGS maintains two seismic crews on the North Slope, one of which is currently engaged in seismic projects, Watt said. A 90-person crew supports 3D data acquisition and a 65-person crew supports 2D acquisition. The 3D crew is equipped for high-resolution data acquisition involving 10,000 or more channels, he said. And all of the field equipment is configured for minimum impact on the tundra, using state-of-the-art rubber tracked vehicles and mobile camps on sleighs.
“They’re the newest camps up there — we bought one in 2000 and one in 2001,” Watt said. “… All of our recording equipment, including the vibrators, is rubber tracked and articulated.”
In the past couple of winters a PGS crew based on the North Slope has also done seismic acquisition in the Glennallen and Nenana areas of the Alaska Interior.
Veritas maintains two Alaska onshore crews, with one crew on the North Slope and one in the Cook Inlet area. Both crews are currently busy.
“We have a crew in the Cook Inlet that’s working on four different proprietary programs this winter,” Hastings said. “We have a crew on the North Slope — a large 3D crew — that’s working on three proprietary acquisitions.”
And Hastings sees continuing demand, especially given the number of new exploration companies that have been coming to Alaska.
“We’re seeing a typical level of activity this winter that we have enjoyed for the last six year,” he said. “But we are seeing an increase in the number of prospective clients.”
Like PGS, Veritas operates low ground-impact vehicles for its Alaska operations. State-of-the-art seismic vibrator technologies create signals for high-resolution recordings that involve thousands of channels.
Hastings said that clients tend to start contracting recording crews as early as June for the upcoming winter onshore seismic season in Alaska.
“I think as demand goes up for crews that may change a little bit, where people are looking at maybe a longer term approach,” he said.
Hastings sees the possibility of increasing the number of Alaska crews if the demand for services reaches a high enough level. However, at a cost of perhaps $30 million, outfitting a new crew becomes an expensive proposition. And obtaining enough trained and experienced personnel could prove problematic.
For example there is a limited number of people with the expertise to maintain the equipment.
“As the crew count increases then they’re in great demand,” Hastings said.
PGS and Veritas also support what’s known as transition zone acquisition — the acquisition of seismic data in shallow water close to shore, such as the area inside the barrier islands of the Beaufort Sea coast. That type of acquisition requires a specialized approach and, in northern Alaska, normally requires ice-free conditions during the summer. PGS operates two transition zone crews worldwide, while Veritas uses a North Slope-based land crew for this type of work. read more

Alyeska, state and federal officials say trans-Alaska oil pipeline less vulnerable than it appears; watch kept for heavy weapons
Mary Pemberton
Associated Press Writer
The trans-Alaska pipeline looks like it would be an easy target for terrorists intent on destroying a valuable American asset, but those responsible for its safekeeping say looks can be deceiving.
The 800-mile pipeline — which carries nearly 17 percent of domestic crude oil production — snakes north to south across Alaska, from the oil fields of Prudhoe Bay to the port of Valdez, where tankers are loaded for delivery to West Coast refineries.
About half of the 48-inch diameter pipeline lies underground. The other half is visible — a huge silver cylinder that parallels two Alaska highways and sits nearly in the backyards of some Fairbanks homes.
The Alyeska Pipeline Service Co., the company that operates the pipeline, even has a visitors center outside Fairbanks where tens of thousands of people have gone to get an upclose look at the pipeline.
“You can walk right under it,” said Alyeska spokesman Mike Heatwole.
Terrorism experts say pipelines in general are easy targets, but tend to be low priority because they can be repaired so quickly.
Officials: hard to get weapons into state
And officials with an intimate knowledge of the pipeline say it’s far less vulnerable than it appears — in part because of the difficulty a saboteur would have getting any weapon capable of serious damage into Alaska.
The pipeline has state, federal and local agencies keeping an eye on it, said John Madden, deputy director of the state Division of Homeland Security and Emergency Management.
When Madden was asked what would keep someone from, say, firing a shoulder-mounted rocket at the pipeline, he cited the difficulty of getting such a weapon near the pipeline.
“The very act of a shoulder-fired weapon suggests transport of that weapon,” he said.
Agencies including customs, immigration, border control and state troopers, work to make sure that such a weapon would never make it into Alaska, he said.
“There are quite a bit of those layers of defense and observation which the public will never see,” Madden said.
However, officials decline to discuss any specifics about what actions have been taken to protect the pipeline.
“We have a security component to our work,” Heatwole said. “It is part of our business.”
SITE found pipeline threat online
Concerns that terrorists were targeting the pipeline were raised several weeks ago when the SITE Institute in Washington, D.C. — the acronym stands for Search for International Terrorist Entities — discovered a well-researched, 12-page Arabic essay posted on the Internet that discussed targeting the Alaska pipeline. Its author is unknown.
“It is not everyone who could sit and write something like this. You would have to have some background on how pipelines work,” said SITE Director Rita Katz.
While the pipeline would be easy to blow up, it is not an attractive target for terrorists, said Henry Lee, director of the Environment and Natural Resources Program at the Belfer Center for Science and International Affairs at Harvard University. The center focuses on international security.
Lee said terrorists blow up pipelines more as an irritant, pointing to a pipeline in Colombia blown up more than 100 times by rebels.
“Pipelines can be blown up, and they are fairly easy to blow up,” Lee said. “The day they did it, it would get headlines in all the papers. The problem is you would have it fixed in a matter of days.”
Chris Kendall, a petroleum geologist at the University of South Carolina who is an expert on the impact of war on oil supplies, described the pipeline as a “soft boundary” target.
“Of course it is vulnerable,” he said.
However, the pipeline’s isolation in Alaska probably works to its advantage, Kendall said. Terrorists need a certain amount of “internal synergy” to be effective, he said.
“They need each other socially,” Kendall said.
He doubted terrorists had that much interest in Alaska.
“Fortunately these idiots, the nihilists, are preoccupied with other focuses. They’re probably running away from people in Pakistan and Afghanistan. They are preoccupied with surviving and fighting in Iraq,” Kendall said.
Alyeska assessed security in ‘01
Alyeska assessed its security following the terrorist attacks on the World Trade Center in New York in 2001, Heatwole said. That same year an Alaska man shot up the pipeline with a .338-caliber hunting rifle, spewing about 300,000 gallons of crude. The man, who is now serving a 16-year prison sentence, apparently had no political motives.
There have been other instances where the pipeline was shot but not perforated.
Alyeska became aware of the Web posting about two weeks ago and sent an e-mail to its employees so people would not become needlessly alarmed, Heatwole said. The company made no changes as a result of the Web posting.
“We are not aware of any pending or imminent threat to the pipeline,” Heatwole said.
The Web posting provided numerous links to other Web sites with specific information on the pipeline, including Alyeska Pipeline Service Co.’s official Web site.
FBI shared information with other agencies
FBI spokesman Eric Gonzalez said when the FBI became aware of the Web posting it shared it with other agencies in a joint terrorism task force formed in 2001. He said the main role of the FBI is to pass on intelligence information and do follow-up.
The Web message was posted on a password-protected al-Qaeda-affiliated forum. It was in response to messages from Osama bin Laden and Ayman al-Zawahri regarding recommended targets. The Web message suggested that attacks be launched on oil pipelines, refineries and pumping stations in Iraq, Afghanistan, Turkmenistan and Alaska.
When referencing the trans-Alaska pipeline, it said, “This kind of target is considered an ideal target for a small group of mujahideen of 4-5 individuals.”
It said members would ideally be American Muslims but if those couldn’t be found than they could be recruited from foreign-born Muslims living in the United States, Canada or Mexico.
“This group should be divided into smaller groups of 4-5 individuals, who have the knowledge and skills need(ed) for explosives,” the Web site said.
It recommended either shooting the pipeline or blowing it up.
“It is preferable that these groups prepare hiding places in different locations alongside the pipeline and detonate the packages from time to time until they can receive the news of the American devils’ defeat,” it said.
It recommended that any attack be planned for summer. read more

For decades natural gas had advantage to United States of being local energy source; billions being invested to bring gas by ship
Brad Foss
Associated Press Business Writer
The United States is increasingly going overseas to meet its natural gas needs, setting in motion a significant shift with a familiar, if unpleasant, side effect for the world’s largest energy consumer.
As America becomes a bigger player in the global natural-gas trade, its vulnerability to faraway production snags and price gyrations will rise, as will its dependence on energy from the Middle East and other volatile regions.
Unlike oil, natural gas has for decades had the advantage of being a local energy source. It either came from within the United States or by pipeline from Canada. But as North American supplies dwindle and demand grows, the energy industry is investing billions of dollars to ship the fuel across oceans as liquefied natural gas, or LNG.
LNG is still a relatively small source of supply for the U.S. But imports are expected to rise fivefold over the next decade, intensifying the competition with Europe and Asia for natural gas coming primarily from the Middle East, West Africa and countries formerly part of the Soviet Union.
“There’s a geopolitical overlay that’s going to look similar to oil,” said Michael Zenker, managing director of the global natural gas team at Cambridge Energy Research Associates.
Which means the price that American homeowners, manufacturers and power plants pay for natural gas will increasingly be linked to the weather in Europe and the pace of economic growth in Asia — not to mention the political stability of countries such as Russia, Iran and Qatar, which combined hold more than half of the world’s natural gas reserves.
The reverse is also true. “A surge in U.S. demand could effectively raise the price for spot LNG cargoes, affecting the price in Japan and other countries,” said George Beranek, a manager in the global gas group at PFC Energy in Washington.
U.S. already third-largest LNG importer
Fuel-hungry America is already the third-largest LNG importer behind South Korea and Japan, according to Energy Department statistics. Spain and France are other major importers today, while China and India are expected to be significant players down the road.
Until recently, the North American natural-gas market was an island unto itself with an abundant resource, and prices were relatively cheap. A supply disruption in the Gulf of Mexico might temporarily drive up prices, but a problem with natural gas output in the Persian Gulf would have virtually no impact.
The fact that natural gas is cleaner-burning than heating oil and coal only burnished its public image, and demand grew rapidly during the 1990s as it became the fuel of choice for heating new homes and running new power plants.
Gradually, though, U.S. — and then Canadian — output began to taper off. Producers drilled many more wells, but still could not offset the depletion of existing wells while satisfying rising demand.
LNG imports tripled in ‘90s
To bridge the gap, LNG imports tripled in the ‘90s, rising to 226 billion cubic feet per year by 2000. And they nearly tripled again by 2004, climbing to 652 bcf, or 3 percent of the country’s total natural gas consumption.
But there is still not much of a supply cushion in the U.S. natural-gas market, which is a major reason why prices climbed steadily in recent years — and then skyrocketed after Hurricane Katrina disrupted output in the Gulf of Mexico. Natural gas futures averaged $9.01 per thousand cubic feet in 2005, more than five times the price in 1995.
Meeting the country’s anticipated demand by 2015 could require the U.S. to import more than 10 bcf per day of LNG, according to government and industry statistics. That’s greater than the amount of gas it will get from Canada via pipeline.
The competition for LNG will be most pronounced in the spot market, a small piece of the global trade in which tankers are usually directed on short notice to wherever the price is highest. But analysts said it could also affect long-term supply contracts because those deals are benchmarked to futures prices, which rise and fall based on short-term events. The U.S. buys LNG primarily on the spot market.
The industry prefers to sell at least a portion of its LNG through long-term agreements to help pay for the large capital investments needed to build critical infrastructure, including plants to liquefy the natural gas, refrigerated double-hulled ships to transport it and terminals on the receiving end to regasify the fuel. It also gives producers a measure of confidence that there will be a market for their supply.
Multibillion-dollar investments
Indeed, companies such as Exxon Mobil Corp., Royal Dutch Shell Plc and BG Group — the largest importer of LNG into the U.S. — are making multibillion-dollar investments up and down the LNG supply chain, creating what one BG executive referred to last fall as a “global virtual pipeline.”
The U.S. has five LNG import terminals today, with four more under construction and dozens more proposed, including one in Fall River, Mass. that local officials oppose.
Some analysts say the U.S. is already feeling the impact of global events that a decade ago would not have registered the slightest ripple in its natural gas market.
For example, UBS natural gas analyst Ronald Barone noted in a recent report how U.S. supplies tightened in January because LNG originally scheduled for delivery at a terminal in Cove Point, Md., was redirected to Europe. European demand for natural gas rose over the past year, analysts said, because of a new import terminal in Britain and a drought that sapped strength from Spain’s hydropower sector.
Trinidad biggest U.S. supplier
In fact, much of the LNG shipped to the U.S. from Trinidad — the biggest supplier to the U.S. — is actually contracted for delivery to Spain, which resells the fuel it does not need into the U.S. market. But as Spanish utilities required more LNG to help fuel power plants, fewer shipments were available to the U.S.
“When things go bad, the U.S. is currently the one that suffers worst because it’s mostly a spot market. It’s the market of last resort,” said Gavin Law, head of the global LNG practice at consultant Wood Mackenzie in Houston.
But Cambridge Energy’s Zenker said there’s another way to look at the situation, one that underscores how the booming LNG business is rapidly connecting natural gas consumers around the globe like never before.
In order to lure back LNG cargoes from the U.S., Spanish utilities paid a premium to the already soaring market price at the Henry Hub, a key Gulf Coast delivery point.
“One could say the Spaniards are paying a price for U.S. hurricanes,” Zenker said. read more

Unidentified buyer digs deep to acquire oil sands leases in February sale, stuffing more cash into Alberta government’s jeans
Gary Park
Just when it seems the Alberta oil sands should be cooling off, things heat up.
The latest surprise occurred Feb. 8 when an anonymous buyer forked over a staggering C$464 million for 10 parcels of land on the western fringes of the Athabasca region, outside the zone where raw bitumen can be extracted by surface mining.
That investment surpassed the record C$433 million collected from all oil sands leasing in 2005 and helped propel this year’s oil sands returns to C$846 million after only three of a scheduled 24 auctions.
Now the industry is left to speculate on the identity of the buyer, who is operating under the name of 1122131 Alberta Inc., a practice used by bidders who want to keep their intentions under wraps.
The numbered company accumulated a total of 88,576 hectares (almost 219,000 acres), including C$80 million for one 9,216 hectare lease at an unparalleled average of C$8,677 per hectare.
Analysts such as Mark Friesen candidly conceded they had no idea who was behind the bidding, suggesting it could either be an established player or someone intent on making a bold entry.
Greg Stringham, vice president of the Canadian Association of Petroleum producers, told the Financial Post that the purchase is evidence of the desire by companies to lock up leases while they can.
Among those who have flagged their interest in the oil sands this year, government officials from India, China and Japan have said the oil sands could become an important part of the global supply equation.
Fort Hills also major buyer
Another major buyer Feb. 8 was the Fort Hills Energy Corp., which paid C$60 million for 12,288 hectares about 50 miles north of Fort Murray, increasing the land holdings at its mining operation to 60,000 hectares.
The partners — Petro-Canada 55 percent, UTS Energy 30 percent and Teck Cominco 15 percent — are developing a two-phase, 190,000 barrel-per-day project that is due to start commercial production in 2010.
UTS Chief Executive Officer Will Roach said the partnership decided it should expand its acreage in a prospective area.
He said independent UTS has no interest in being taken over by any foreign-controlled firms, having seen its stock value climb 68 percent so far this year.
New well permit record
The pace of oil sands activity pushed new well permits across Canada in January to a record 4,078, easily beating the 2,618 posted in January 2005 and is driving Alberta government land sales into unimagined territory.
After three auctions this year, Alberta has collected C$1.24 billion from the sale of 867,381 hectares (2.14 million acres) at an average C$1,431 per hectare.
That compares to just C$182 million from 327,398 hectares at an average C$555 for the same period of 2005.
For all of 2005, it posted a record C$2.26 billion, beating the previous high of C$1.1 billion in 1997, and Energy Minister Greg Melchin is forecasting the province could end 2006 with more than C$3 billion in its coffers from land sales.
The Feb. 8 auction generated a record C$651 million in total deals from 284,124 hectares, representing a staggering C$2,292 per hectare, with oil sands leases accounting for C$559 million and 151,817 hectares at an average C$3,684.
Penn West signals extension
An extension of oil sands activities from the Athabasca region of northeastern Alberta to Peace River in the northwest was also signaled by Penn West Energy Trust, which paid C$3.7 million for 8,393 hectares, adding to its undeveloped base of 56,600 hectares supporting its Seal heavy oil project.
Seal is currently producing about 900 barrels per day from a pilot project and is expected to reach 4,000-5,000 bpd by late 2006.
Meanwhile, companies evaluating the prospects of oil sands and bitumen leases accounted for the bulk of 1,418 wells in northern Alberta, pushing the province’s count to 3,569, including 1,536 conventional gas wells, 246 coalbed methane wells and 228 conventional oil wells.
The top oil sands evaluation projects involve the Nexen/OPTI Canada partnership, North American Oil Sands, Shell Canada, Synenco Energy, EnCana, Value Creation, Canadian Natural Resources and Deer Creek Energy, which was acquired by France’s Total for C$1.67 billion last year.
Permits were issued for 1,776 gas wells in Alberta, British Columbia and Saskatchewan — 246 ahead of the same month last year — and new oil licenses edged up to 542 from 516.
Heading the list of permit-holders were EnCana (down 272 to 421), Canadian Natural Resources up 79 at 234), Apache Canada (152), Husky Energy (135) and EOG Resources (79). read more

New federal minister endorses socio-economic fund, but NWT raises bar
Gary Park
The new Canadian government is sending out encouraging signals that it will deliver C$500 million in socio-economic funds to aboriginal communities along the planned Mackenzie Valley gas pipeline route, but it has been served notice that the fund may not be enough.
In a submission Feb. 14 to the Mackenzie Joint Review Panel, the Northwest Territories government said the fund — promised by former Deputy Prime Minister Anne McLellan — is “not enough.”
On the day the panel started its hearings on the environmental, cultural and social impacts of the project, the territorial government is demanding action from the Conservative government of Prime Minister Stephen Harper on a decades-old bid by the Northwest Territories to collect its own resource royalties rather than have them transferred through the federal government as well as having greater control over resource development.
Further complicating matters, the residents of a lands corporation in Fort Good Hope say they have rejected an access and benefits agreement proposed by Imperial Oil, which is demanding to see the actual count.
Government ‘supportive’ of fund
On the positive side, Indian Affairs and Northern Development Minister Jim Prentice told the Canadian Press prior to the review panel hearings that the Harper government has been “supportive” of the C$500 million fund suggested by the previous administration.
He said that although the final details have to be negotiated and any overall arrangement needs cabinet approval, the issue is “important and is something we will turn our attention to fairly quickly.”
Prentice said he understood the importance of a fund and the role it is designed to play in building a social infrastructure in the Northwest Territories.
Unlike parallel National Energy Board hearings, which focus on economic and technical matters, the Joint Review Panel will capture the depth of feeling among northern residents about the pluses and minuses of the Mackenzie project, with almost 100 parties registered as intervenors, including aboriginal communities and tiny hamlets who are concerned about how their fragile ecosystems might be affected and what training, job and business opportunities will be available to them.
The Northwest Territories government has calculated the pipeline could generate 15,000 person-years of work in the territories over its lifetime as well as encouraging a wave of new energy exploration and supporting the long-held hope of many that an all-weather road can be built along the Mackenzie Valley.
Environmentalists and federal scientists are also poised to enter the debate, unhappy that Imperial and its partners — Shell Canada, ConocoPhillips Canada and ExxonMobil Canada — have failed to calculate the effects of climate change on the project. Some are expected to argue that the loss of permafrost and rising ocean levels could put the Mackenzie Delta gas fields and pipeline at risk.
The panel delivers its report and recommendations to the National Energy Board after its hearings conclude Nov. 16, but the final approval is in the hands of the federal regulator, which is expected to deliver a verdict by mid-2007.
NWT government looking at costs
In its submission to the board, the Northwest Territories government said the Mackenzie project is likely to account for half of the additional C$475 million in socio-economic costs — such as policing, health, welfare, transportation, education and employment services — that the territorial government will face over the next 10 years.
But the Northwest Territories is forecast to receive only C$10 million a year in personal tax revenues during construction of the C$7.5 billion project, while corporate and business taxes are an unknown.
Once the three Delta anchor fields and the pipeline start commercial operations, the Canadian government is expected to reap almost C$378 million a year in various revenues, of which only C$21.8 million will go to the Northwest Territories after taking into account a financing formula that reduces federal grants by clawing back 95 percent of gas-related revenues.
The NWT also warned that slow progress in talks with Ottawa could see the transfer of public lands and resources and the related resource revenues delayed to 2008.
The upshot for the NWT is “uncertainty regarding its fiscal ability to address the impacts of the project that fall within its responsibility,” the submission said.
Lands corporation won’t disclose voting results
Meanwhile, in Fort Good Hope the lands corporation is refusing to disclose the voting results that turned down an agreement intended to provide access to Ka’sho Got’ine land to build the pipeline.
Arthur Tobac, president of the Yamoga Lands Corp., said the atmosphere in his community is “really tense … there’s a lot of unrest here.”
He said some lands corporation members are confused about how the access and benefits pact will fit with the one-third ownership share of the pipeline that is being pursued for Native communities and are unsure how much they can expect from the federal government’s impact fund.
Former NWT premier Stephen Kakfwi, negotiator for the Fort of Good Hope, accused Imperial and Prentice’s department of dividing the people and undermining its leaders, but he and Tobac are hopeful that a turnaround is possible.
Imperial spokesman Pius Rolheiser told the Canadian Broadcasting Corp. that it is “critically important” for his company to know whether the community vote was overwhelmingly against the agreement, or if it slightly favored rejection. read more

New NSB mayor casts friendly eye on extended reach drilling for offshore
Kay Cashman
The new mayor of the North Slope Borough says if the oil industry can show him technology that ensures the protection of the Chukchi and Beaufort seas he would “welcome discussions” about exploring and producing oil outside the barrier islands. But so far Edward Itta says he has “seen nothing — no new technology — that would allay” his many concerns.

In a recent interview with Petroleum News Itta said he is “pleased” Shell has hired his predecessor, former borough Mayor George Ahmaogak Sr., as its Alaska community affairs manager.
“I think he will be a great asset for Shell,” Itta said. “He certainly has a lifetime of knowledge and experience regarding the offshore up here. I’ve worked with him in the past. I still intend to work with him in his capacity with Shell.”
Itta has plans to meet with Ahmaogak “on Feb. 21 or 22.”
“I am looking forward to meeting with him,” he said.
Ahmaogak’s primary responsibility with Shell is working with local communities, including those on the North Slope where Shell is currently focused on exploring its Beaufort Sea leases.
But it will take a lot to make Itta, who describes himself as “pro-development,” approve of oil and gas activities outside the barrier islands in the Beaufort or Chukchi seas of northern Alaska.
“Mayors before me were opposed to (oil and gas activities) in the offshore and mayors who come after me will be opposed, and I am opposed,” he said.
On Feb. 1, Itta told the U.S. Minerals Management Service “there’s a reason for this continuity” with borough mayors. “It tells you how deeply we feel about protecting the migratory paths of the bowhead.”
At the MMS public scoping meeting for the upcoming Chukchi Lease Sale 193 he said if exploration and development could be done without disrupting the whales, then the borough might support outer continental shelf activity “just like we support most onshore development. But industrial activity out in the ocean — the seismic work and the ship traffic and construction and operation of wells — it all makes a lot of noise, and that noise carries through the water. The bowheads hear it, and it changes their normal patterns of travel and feeding.”
The borough’s other major concern is “the risk of an oil spill or even the accidental loss of drilling muds, solvents or any of the many other toxic liquids associated with oil activity. What happens when that stuff gets loose in the ocean? How far does it spread? How much damage does it do to the bowhead’s feeding grounds? And how do these toxins affect the health of the bowhead and the Inupiat who eat them?” Itta asked.
“We know that oil spill cleanup uses primitive technologies with very questionable rates of success. There is no technology to clean up a spill in broken ice conditions, and even in the best conditions, nobody in industry can honestly brag about their ability to really protect the environment in the case of a sizeable spill,” he said.
“These are the things that keep our whalers awake at night. We don’t want to stand in the way of development if we don’t have to. But when some of the most important elements of our traditional culture are being endangered while there is plenty of oil to be found onshore, then we have to stand up and ask the hard questions.”
Extended reach drilling meets approval
Technology that generated a flicker of optimism in Itta for offshore drilling was industry’s ability to drill several miles offshore from an onshore location — i.e. extended reach drilling.
David Harding, head of government and external affairs for the borough, raised the subject of extended reach drilling during the interview with the mayor, referring to a Feb. 5 PN article that mentioned BP’s plan to drill and produce its Beaufort Sea Liberty prospect from a single onshore drill pad, drilling wells into the reservoir as far as eight miles from shore.
BP’s original plan was to develop Liberty from a gravel island, which is what it did with Northstar, the only field currently producing oil in Alaska’s OCS. But it scrapped that plan in favor on an onshore development as extended reach drilling technology improved.
Using “leading edge technology,” Harding said, “seems to be turning offshore drilling into onshore drilling.”
“Surely anything that can be originated from land is going to be less of a challenge for spill clean up versus in the water,” the mayor said, mirroring Harding’s enthusiasm for BP’s plans at Liberty.
Unfortunately, most of the Beaufort and Chukchi cannot be reached with ERD unless it originates on an island or other offshore structure (or vessel). All the wells in the Chukchi drilled to date, for example, were 70-plus miles from shore.
Short and long term priorities
When asked what his short and long term priorities were for oil and gas Itta said “always, first and foremost, protect our cultural onshore and offshore resources and heritage. … Eskimos were here before oil and plan on being here after oil.”
As part of that effort the mayor would like to see “industry apply traditional knowledge … relative to ice … when they plan offshore activities. We have thousands of years of experience here,” he said.
He’s also “a big advocate of alliances” with industry and government that create “baseline data prior to any major activity” in the offshore.
Itta would also like to see documentation of any “adverse impacts” that might result from oil and gas activity incorporated into this baseline data.
Borough’s impact on offshore activities
In his comments to MMS, Itta said “Since MMS is going to offer the Chukchi for sale again no matter what we say, I would ask that the agency put responsible conditions on any activity.” These include:
• Deferral areas to protect whaling activities;
• Conflict avoidance agreements to ensure proper relationships between developers and subsistence users;
• Proof of the industry’s ability to contain and clean up any spills;
• Risk analysis related to oil spills; and
• Risk analysis related to noise.”
When asked what the borough planned to do to deter or impact offshore activities, Itta said he would continue to participate in MMS’s planning process by offering testimony on behalf of the borough.
He also referred to conflict avoidance agreements (CAA) with the Alaska Eskimo Whaling Commission (AEWC) and a good neighbor policy as being effective vehicles for local impact on offshore activities.
Currently, oil and gas companies are encouraged to have both by federal and state agencies, although they cannot necessarily be required to have them, federal officials told PN on Feb. 16.
“We don’t have the authority to require either of those things, but we strongly encourage them,” MMS Acting Regional Director Rance Wall said. “What we do require is that they show good faith to work things out with the locals and one way of showing that is having a conflict avoidance agreement and good neighbor policy in place.”
The companies, he said, have been willing to work with the borough and locals.
“We haven’t had an activity occur without a conflict avoidance agreement in recent history” (last 10 or 15 years) offshore northern Alaska. Wall said.
“From the state side the agreements are not mandatory, but we do encourage them. The North Slope Borough I think does mandate them at times through their permitting and zoning authority, but not in all cases. The state could mandate a conflict avoidance agreement if the situation warrants but probably not a good neighbor agreement at least like the ones we’ve seen so far,” said the State of Alaska’s Division of Oil and Gas Director, Bill Van Dyke.
Gordon Brower with the North Slope Borough’s planning department says the borough does require a conflict avoidance agreement with the whaling commission “for mainly offshore activities … and we enforce that. During operations for development we do require a good neighbor policy. For exploration activities, only in cases where … conflict is likely to occur” does the borough require a good neighbor policy.
Brower said the IHA, Incident Harassment Authorization from National Marine Fisheries Service (NMFS), “requires operators and vessel activities to get into a CAA with AEWC … as a condition of approval.”
New comprehensive plan basically done
When asked if he and his staff would revisit the borough’s comprehensive plan and Municipal Code Title 19, Itta said no.
“It’s basically finished” and close to distribution, he said.
“We’re still working on portions of Title 19 that apply. … Karla Kolasch is working on that. … She’s one of my special assistants.”
Borough officials have said the new comprehensive plan will incorporate traditional values and help chart a course for the future, including providing direction for managing the borough’s resources in the face of declining revenues.
Title 19 contains the borough’s land management regulations and Barrow zoning ordinances, which were adopted in 1990 and are part of the comprehensive plan.
The title contains a set of land management principles and procedures for development in the borough. Its purpose is to achieve the goals and objectives and implement the policies of the plan, including the coastal management plan.
Key players in Itta administration
Kolasch’s duties under the new mayor include overseeing long range planning projects; coordinating and preparing the mayor’s comments on development related activities and documents; serving as the liaison to the borough’s law, wildlife management, and planning departments; representing the mayor at meetings, hearings and negotiations; working with villages on providing input into development activities; working with federal and state agencies and industry; serving on the North Slope Science Initiative Oversight Group staff committee and the Joint Borough Economic Development Committee; and assisting in coordinating negotiations/activities related to stranded gas.
Other key administrators in Itta’s administration include George Olemaun, chief administrative officer and the man who headed Itta’s transition team, and Johnny Aiken, director of Planning and Community Services. Among other things, Aiken’s department oversees oil and gas permitting and zoning changes. read more

18 Feb 2006 16:49:03 GMT
Source: Reuters
Feb 18 (Reuters) – Nigerian militants launched a string of attacks on the world's eighth largest oil exporter on Saturday, abducting nine foreign workers, bombing a major oil export platform and sabotaging two pipelines. Royal Dutch Shell suspended exports from the 380,000 barrel-a-day Forcados tanker terminal, a senior industry source said. Nigeria supplies about 2.4 million barrels daily.
The following foreign companies operate in Nigeria:
* Royal Dutch Shell is the largest, producing over 40 percent of Nigeria's oil. It employs 5,000 people.
* Exxon Mobil is Nigeria's second largest oil producer, with about 720,000 barrels of oil equivalent per day (boepd) of crude, condensate and natural gas liquids. It has 1,900 employees
* France's Total produced around 270,000 boepd in 2004 in Nigeria and has about 1,200 employees.
* Italy's ENI produced around 161,000 boepd in 2004.
* U.S. major Chevron averaged production of 117,000 bpd of oil in 2004. It employs over 2,000 people. read more

Feb. 18, 2006, 10:48AM
By OSMOND CHIDI Associated Press Writer
© 2006 The Associated Press
WARRI, Nigeria — Militants launched a wave of attacks across Nigeria's oil-rich southern delta Saturday, blowing up oil installations and seizing nine foreign oil workers, including three Americans, officials said. A Royal Dutch Shell official said the company was forced to shut down a facility that moves 400,000 barrels of oil a day _ 16 percent of the West Africa nation's output.
About 40 militants overpowered military guards and seized the foreigners before dawn from a barge belonging to Willbros, a Houston-based oil services firm that was laying pipeline for Royal Dutch Shell, a Willbros official said. He spoke on condition of anonymity because he was not authorized to speak to the media.
The militants provided the names of the kidnapped workers _ three Americans, two Egyptians, two Thais, one Briton and one Filipino _ in an e-mail Saturday to The Associated Press.
State Department spokesman Noel Clay said he had no information about the workers, including their identities. The British Foreign Office identified the kidnapped Briton as John Hudspith, of southern England. Officials of the other hostages' home countries either could not immediately be reached or did not provide confirmation.
Shell official Donald Boham said militants attacked the Forcados oil loading platform in the western delta, which moves out 400,000 barrels of oil daily. Nigeria normally produces 2.5 million barrels of oil a day.
The Movement for the Emancipation of the Niger Delta said in the e-mail that the attacks were a response to military helicopter assaults this week on ethnic minority communities in the region. The militants threatened more attacks would follow on “a grander scale.”
Oil prices Friday jumped more than $1 and settled near $60 a barrel on supply concerns sparked by the militant group's threat to wage war on foreign oil interests.
In apparently coordinated violence, militants attacked a tanker berth at Shell's Forcados export terminal and blew up a major Shell crude oil pipeline near a facility by the western delta's Chanomi Creek, Boham said. The militants said that they also damaged equipment linking the pipeline to several smaller lines.
Militants also claimed they had destroyed a state-run pipeline feeding natural gas from the delta's Escravos plant to the country's commercial capital, Lagos. That attack could not be independently confirmed.
The military said its helicopters on Wednesday and Friday targeted barges used by criminal gangs to steal crude oil from pipelines for sale, a thriving illegal trade that sometimes diverts up to 10 percent of the region's daily exports.
Nigeria produces about 2.5 million barrels a day.
The militants say they are fighting for more autonomy, a greater share of oil wealth and compensation for environmental degradation for the impoverished region's estimated 8 million Ijaw people. The area's largest tribe accuses the government and oil companies of cheating it of wealth produced on its land.
The group said the helicopter attacks this week were on minority communities and that militants would now target all helicopters in the delta, including civilian aircraft. The group has accused foreign oil companies of providing their helicopters and air strips for military operations.
The group has claimed responsibility for attacking two pipelines and abducting four foreign oil workers, including an American, who were released last month after 19 days in captivity.
The militants Saturday reiterated warnings for foreign oil workers to leave the Niger Delta.
“Expatriates must realize that they have been caught up in a war, and the Nigerian government can do nothing to guarantee the security of anyone,” the group said. “They are warned again to leave while the doors are still open.”
On Friday, Shell shut down an oil facility pumping 37,800 barrels of crude daily in Nigeria's southern oil-rich delta, following an unexplained blaze at a nearby oil well.
Associated Press writer Dulue Mbachu in Lagos, Nigeria, contributed to this report. read more

18/02/2006 – 09:47:05

Protests against Shell Ireland are due to take place at locations across the country today.
Members of the 'Shell to Sea' group will be mounting pickets in Cork, Ennis and Belfast.
Shell's European headquarters in the Netherlands is also expected to face pickets.
The protestors want crude oil to be processed at an off-shore facility, instead of current plans which involve bringing it ashore with a pipeline for processing in Co Mayo.
Spokesperson Bob Kavanagh said that today's action is aimed at putting the issue back on the political agenda. read more

Feb. 18 (Bloomberg) — Nigerian militants who held four oil workers hostage last month said they attacked an oil pipeline this morning in the Niger River delta and vowed more strikes in retaliation for raids by Nigerian military forces.
The militants, in an e-mailed statement today, said their forces destroyed a pipeline at Escravos at 3:25 a.m. local time today. The pipeline, run by the state-owned Pipelines and Products Marketing Co., feeds petroleum products to the northern city of Kaduna, the statement said.
The militant Movement for the Emancipation of the Niger Delta, or MEND, said it was launching a series of “impromptu'' strikes against oil installations in response to raids by Nigerian military helicopters this week on the Gbaramatu area of Delta state. It said its forces would target all helicopters in the Niger delta and warned foreigners to leave the region.
The group has vowed to cut Nigeria's oil export capacity by 30 percent in February. Royal Dutch Shell Plc's venture has halted 106,000 barrels a day, or about 5 percent of the country's total output, since an attack by MEND on its Trans-Ramos pipeline on Jan. 11. The same day the militants abducted four foreign workers and released them unharmed 19 days later.
“All pipelines, flow stations and crude loading platforms will be targeted for destruction within the next few hours by our units,'' Jomo Gbomo, a self-described MEND member, said in the statement. “This impromptu action is a direct consequence of the helicopter attacks on several communities in the region that has led to death and injury of numerous civilians.''
Expatriate Warning
“Expatriates must realise that they have been caught up in a war and the Nigerian government can do nothing to guarantee the security of anyone,'' today's statement said. “They are warned again to leave while the doors are still open.''
The militants say their aim is to win control of Nigeria's oil riches for the people of the Niger delta. Nigeria was the sixth-biggest producer in the Organization of Petroleum Exporting Nations last month, according to Bloomberg data.
Communities in the Niger delta, a maze of creeks and rivers feeding into one of the world's biggest remaining areas of mangroves, are among Nigeria's poorest, a Shell-funded report on the area said in 2004. It cited studies showing per-capita income in the region to be below the national average of $260. Unemployment surpasses 90 percent in some areas.
MEND is also demanding that the Nigerian government release Diepreye Alamieyeseigha, the former governor of Bayelsa state, who was impeached and arrested on money laundering charges, and Mujahid Dokubo Asari, a militia leader who is in jail on treason charges.
Helicopter Attacks
Military helicopters departing from the Osubi airstrip operated by a venture of Royal Dutch Shell Plc attacked suspected oil smugglers in the Gbaramatu area near Warri on Feb. 15, killing as many as 20 people, Lagos-based ThisDay newspaper reported yesterday.
Shell spokeswoman Caroline Wittgen would neither confirm nor deny whether the Osubi airstrip, near the city of Warri, was used by the helicopters, in an e-mailed statement on Feb. 16. Shell wouldn't comment on military matters, she said.
“Armed intervention is always a decision for the proper authorities and not for private companies such as Shell,'' Wittgen, said in the e-mailed statement.
When a helicopter resumed attacking the Gbaramatu area yesterday, militants fired on it, MEND said. The attack was confirmed by Nigerian military spokesman Major Said Hammed, Agence France-Presse reported yesterday.
MEND today warned foreign oil workers to leave the region immediately.
To contact the reporter on this story:
Karl Maier in Khartoum at [email protected]
Last Updated: February 18, 2006 02:16 EST read more

By THE ASSOCIATED PRESS
WARRI, Nigeria (AP) — A Nigerian militant leader reportedly warned foreign oil workers to leave the country's troubled delta by midnight Friday as an army helicopter gunship exchanged fire with militants in the latest violence to strike the region. The British Broadcasting Corp. reported militant commander Godswill Tamuno had announced his Movement for the Emancipation of the Niger Delta was declaring ''total war'' on foreign oil interests and warned them to leave the oil-rich southern delta by midnight.
The same group has issued similar threats for more than a month and claimed responsibility for attacking two pipelines. It abducted four foreign oil workers and later released them.
Nigeria is Africa's leading oil producer and the fifth-biggest source of U.S. oil imports.
News of the tensions helped propel oil prices higher Friday on the New York Mercantile Exchange where crude oil futures ended $1.42 firmer at $59.88 a barrel.
Meanwhile, an army helicopter gunship patrolling the delta Friday exchanged fire with armed militants, the military said. No casualties were reported.
Maj. Said Hammed, a spokesman for a joint task force charged with maintaining security in the delta, said the helicopter returned fire after it was shot at by armed men protecting a barge stealing crude oil from a pipeline. He gave no other details.
In an e-mailed statement, the Movement for the Emancipation of the Niger Delta said the helicopter had carried out attacks on ethnic Ijaw communities, and militants responded with ''rockets and machine gunfire.''
''We cannot at this point be certain if it was hit,'' the militant statement said.
On Wednesday, the army had said it attacked eight barges being used by smugglers to steal crude oil from pipelines. Militants had portrayed the earlier incident as an attack on Ijaw communities by military helicopters using an airstrip in the oil port city of Warri operated by Royal Dutch Shell PLC. They threatened to target such aircraft.
Officials of Shell, the biggest foreign oil company in Nigeria accounting for a little under half of the country's daily exports of 2.5 million barrels, were not immediately available for comment.
The militant group says it is fighting for local control of oil wealth in the impoverished region and claims responsibility for a recent rash of attacks on oil operations and the taking of foreign hostages.
Nigerian security agencies estimate that as much as 10 percent of the country's oil is sometimes stolen by criminal gangs for sale to vessels offshore, providing a source of funds for arms used by gangs responsible for worsening violence in the oil region. read more

By REUTERS
BEIJING (Reuters) – China and Iran could sign a multi-billion dollar agreement on developing a major oilfield in Iran as early as next month, the semi-official Caijing Magazine said on its Web site.
The magazine cited Mu Shuling, an executive at Sinopec Corp. (0386.HK), as saying a delegation of the National Development and Reform Commission, China's economic-planning body, could go to Iran as early as March, where the two could sign a deal on jointly developing the Yadavaran field in southern Iran.
The deal, which the magazine said could be worth as much as $100 billion in gas and oil sales and field development costs, follows a memorandum of understanding signed in October 2004. Negotiations over Iranian oil projects often drag on for years.
A spokesman at the Iranian embassy said he could not confirm the report but news of the potential deal comes as Iran is engaged in a stand-off with the West over its nuclear program.
The International Atomic Energy Agency (IAEA) voted earlier this month to report Iran's case to the U.N. Security Council, which could impose sanctions.
Under the terms of the agreement, China, which has repeatedly urged a diplomatic solution to the nuclear crisis, would agree to buy 10 million tonnes of liquefied natural gas (LNG) from Iran each year over the next 25 years in return for the right to develop the field, the magazine said.
Yadavaran has estimated reserves of about 3 billion barrels and is expected to produce about 300,000 barrels per day (bpd), about the same volume of crude that China imports from Iran.
The magazine said that under the current arrangement, Sinopec would take a 51 percent stake in the project, and India's Oil and Natural Gas Corp. (ONGC) (ONGC.BO) would own 29 percent, slightly bigger shares than had been initially agreed. The remaining 20 percent could go to the National Iranian Oil Company (NIOC), the magazine said. It said Royal Dutch Shell (RDSa.L) had also expressed interest in the remaining fifth.
The report cited Mu as saying China's initial target of starting to buy natural gas from Iran in 2009 could be over-optimistic.
“The earliest date at which it could be started is 2010. The term of that contract has already been extended to 2034,'' Mu said.
China has repeatedly urged negotiation and restraint to resolve Iran's nuclear stand-off.
“It's extremely important for the international community to uphold the consensus on resolving the Iran nuclear issue through diplomatic means and call on the related parties to maintain calm, restraint and patience,'' Chinese Foreign Ministry spokesman Qin Gang told a news briefing on Thursday.
On Wednesday, the United States threatened sanctions against Tehran for resuming uranium enrichment for nuclear fuel without resolving suspicions it secretly wants to build atomic bombs. read more

By REUTERS
WARRI, Nigeria (Reuters) – The Nigerian armed forces attacked targets in the Niger Delta by helicopter gunship on Friday and militants fired back with rockets, escalating tensions in the volatile oil-producing region.
Militants and a community leader said the helicopter targeted ethnic Ijaw communities in the Gbaramatu area of Delta state and this followed a similar attack on Wednesday.
“Our units there were authorized to shoot down this craft which they attempted with rockets and machine-gun fire. The chopper immediately abandoned its mission and fled,'' said the Movement for the Emancipation of the Niger Delta (MEND).
“We cannot at this point be certain if it was hit,'' the militant group added in an e-mail statement.
The joint military taskforce in the area said the helicopter had been targeting barges involved in crude oil theft — a practice known locally as bunkering.
“Militants that were giving protection to these illegal bunkering barges, ostensibly to show their readiness, opened fire on the gunship and this action equally attracted a response,'' the taskforce said in a statement.
But a community leader from the area said the helicopter fired on the three villages of Ukpogbene, Seingbene and Perezouweikoregbene, and local people had fled into the mangrove forest to seek shelter.
“The helicopter came in again today. It bombed our community. We don't know what we have done to them,'' Chief Patrick Bigha told Reuters.
“REVENGE ATTACK''
An ethnic Ijaw rights activist with extensive knowledge of militant groups in the Niger Delta said: “This is a long-awaited revenge attack on communities they suspect of harboring militants.''
The attacks on Wednesday and Friday are the first major military operations in the delta since MEND staged a series of attacks against the oil industry last month.
The militants, who are heavily armed and operate in speedboats with military-style efficiency, killed 14 soldiers in one attack on an oil platform on January 13, and a military response had been expected. MEND said the helicopter took off from the Osubi airstrip in the state capital Warri, operated by Royal Dutch Shell, which the militants say is meant to be a civilian airfield.
“Operators of craft using the Shell Osubi airstrip must be warned that this place is now considered a military facility and we will attempt to shoot down any planes landing or taking off from this facility,'' the e-mail statement said.
A Shell spokesman said: “The Osubi airstrip is built and operated for use by the oil industry in Delta state.''
He added that any questions on military operations in the region and “the use of airstrips during such operations'' should be raised with the appropriate authorities.
The militants, who say they are fighting for greater control of oil resources, kidnapped four foreign oil workers for 19 days in January and carried out a series of attacks on oil pipelines and platforms that cut Nigerian oil output by 10 percent.
Militancy in the Niger Delta, a vast region of mangrove swamps and creeks that accounts for almost all of Nigeria's 2.4 million barrels per day of oil, is rooted in the extreme poverty of the majority who live there.
Their resentment at a multibillion-dollar industry that has brought few benefits for them, and a breakdown of law and order, have fueled a cycle of militant attacks, army repression, kidnappings, sabotage and oil theft. read more

Lorna Siggins and Tim O'Brien
Feb 18, 2006
About 60 people protested outside the Shell oil company's offices in Dublin yesterday, in opposition to the Corrib Gas pipeline.
Members of the Shell to Sea Campaign chained bicycles across the entrance to the offices on Adelaide Road, in what they said was a symbolic precursor of planned blockades of Shell installations in Mayo. The protests were mirrored by pickets at Shell offices in the Netherlands and Britain and Shell filling stations in the west of Ireland.
Co-ordinator of yesterday's protest Tadhg McGrath said the campaign was frustrated “by Shell's lack of a plan B or any alternative” and believed the oil company would press ahead with construction of the Corrib Gas pipeline in March.
But he said the campaign was prepared to take “direct action” to prevent the construction work going ahead. “We have heard that Shell has block-booked hotels and guesthouses in Mayo for an Italian construction crew. But at the end of this month the Shell to Sea camp will be up and running again in Mayo and we are prepared to blockade their work.”
Mr McGrath said funds had been raised internationally over the winter and members had travelled abroad, visiting protest camps and amassing equipment necessary to mount a “Greenham Common” style protest.
Yesterday's protests were part of a weekend of events which continue in Ireland, Britain, the Netherlands and Sweden today.
A highlight of today's events is likely to be a protest as Taoiseach Bertie Ahern addresses an Ogra Fianna Fail convention in The West County Hotel, Ennis, this evening.
Meanwhile, Shell E&P Ireland has called for a “cooling” of the debate over the 900 million Corrib gas project. The company has also confirmed that former Mayo county secretary Padraig Hughes has been engaged on a consultancy basis.
Commenting on yesterday's protest Shell E&P Ireland's managing director Andy Pyle urged the “five men from Rossport “to resume mediation talks. We are never going to solve the problems we have in Rossport if we are constantly arguing with each other. There is a mediation process in place, which the five men from Rossport have stepped out of at the moment. I call on them to resume talks so that they themselves and Shell can sit down face-to-face and start working out a solution to this problem.” The company was “fully committed to addressing the genuine concerns of the local community” and believed the twin procedures of mediation and the Government safety review of the onshore pipeline could lead to a resolution of issues.
“The Corrib gas project could bring fantastic benefits to Erris and Mayo generally and is essential for Ireland's security of energy supply,” Mr Pyle said.
“It's about time we took some of the heat out of this problem and started talking constructively – dialogue is the only way forward.”
The five men jailed for 94 days last year over their opposition to the pipeline again called on the Minister to clarify recent comments which led to the men's decision to suspend mediated discussions with Shell.
The Minister had “unilaterally changed the format of mediation”, the five said. Time, space and confidentiality were required to reach agreement, but the Minister had “removed that possibility” and had either “consciously misled us or reversed his September position”. read more

Feb 18, 2006
PROTESTERS yesterday blockaded the entrance to Shell's Irish headquarters with bicycles as part of an international campaign against the Corrib gas pipeline.
The construction of the pipeline in North Mayo was suspended last year after a determined campaign which saw five men from Rossport spend 94 days in jail.
The Shell to Sea group protested outside Shell's headquarters on Dublin's Upper Lesson Street to highlight the re-opening of its solidarity camp in Rossport. “We want to stand beside the locals until the aims of the campaign are achieved,” said camp spokesman Bob Kavanagh.
There were no disturbances, but protesters chained bicycles together, chalked slogans on the pavement and paraded posters saying 'Shell Hell' and 'Safety before profits'.
Mr Kavanagh said he hoped more than 60 people would move to Rossport to live in the solidarity camp, to be sited at the point where the gas is due to come ashore.
“We're not asking people to totally suspend their lives. If you can only come down for a few hours, a couple of days or a weekend, whatever you have the time to do.”
The Shell to Sea group is calling for the gas to be processed offshore rather than transported through the pipeline to an inland refinery.
Communications, Marine and Natural Resources Minister Noel Dempsey is currently considering whether to grant Shell permission to resume construction of the pipeline, following an independent report on the risks it could pose to local residents. read more

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

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