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April 2nd, 2006:

Reuters: Nigerian oil staff need more security to return

02 Apr 2006 15:39:43 GMT
Source: Reuters
By Tom Ashby
LAGOS, April 2 (Reuters) – More naval patrols in Nigeria's southern delta region have failed to persuade oil company Royal Dutch Shell to return to its abandoned oilfields as militants continue to clash sporadically with troops, oil industry and military officials said on Sunday.
About 550,000 barrels of oil per day, or 23 percent of Nigerian output, has been shut for six weeks since militants staged a series of attacks on oil platforms and pipelines in the vast wetlands region on Feb. 18.
The supply interruption has helped keep world oil prices near record highs above $65 per barrel amid persistent concerns over supply from other major exporters Iran and Iraq.
Brigadier-General Alfred Ilogho, who commands a joint military task force in the Niger Delta, told Reuters he has taken delivery of a number of new fast patrol boats and increased their presence in the creeks.
The extra hardware is part of a twin-pronged government strategy to calm tensions, which also includes engaging militants in talks, he told Reuters.
“We hope our increased patrols of the waterways will increase the confidence of multinationals to resume operations,” he said.
But militants fired on one such patrol in the area of Shell's abandoned Forcados oilfields last Thursday, illustrating the continued risks of sending oil workers back to the area before a truce is signed, oil company executives said.
“There were clashes in the area last week. I don't think Shell will want to send its people there,” said an executive, asking not to be named because he is not authorised to talk to the media.
The militant Movement for the Emancipation of the Niger Delta has waged a four-month campaign of sabotage and kidnapping against the oil industry in the world's eighth largest exporter, cutting supplies by up to a quarter at one point.
They kidnapped 13 foreign oil workers in January and February, but they released the last three captives on March 27, raising hopes that the crisis could be moving towards an end.
However, the militants have threatened to stage more attacks on oil installations until their demands — more local autonomy over the oil wealth, the release of two jailed leaders and compensation for pollution — are met.
The government has invited a large number of delta interest groups, including traditional rulers, officials, activists and “youth leaders” — a local term for militants — to a meeting in the capital Abuja on Wednesday, but many groups have already rejected the idea as a futile talking shop.
The delta in southern Nigeria and its offshore extension pumps all of Nigeria's normal oil output of 2.4 million barrels per day, but its inhabitants feel cheated of their wealth.
The majority of its 20 million inhabitants have seen few benefits from decades of oil extraction that has yielded billions of dollars in profits for the government and foreign oil companies.
Vast areas of the delta are not connected to the national power grid. There is no clean water in many places. There are few roads. Teachers and doctors are in short supply.
The environment has been wrecked by oil spills and the constant burning of gas associated with the extraction of oil.
Militants, often armed and funded with the proceeds of crude oil theft, roam the mangrove-lined waterways of the vast delta in speedboats. read more

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Miami Herald (Mexico Edition): Private funds needed to bolster output

Petroleos Mexicanos, the world´s third-largest oil producer, risks declining output for the first time in seven years unless lawmakers allow for private investment, cutting supplies on the world market as demand increases.
Pemex Chief Executive Officer Luis Ramírez Corzo said Mexico will leave billions of barrels untapped in deep Gulf of Mexico waters and in a costly onshore field without partners to provide technology and share risks. Mexican law allows only Pemex to extract oil and gas and to refine crude, barring companies such as Exxon Mobil Corp. and Royal Dutch Shell Plc from investing in the industry.
The country since 1979 has pumped the majority of its oil from Cantarell, the world´s second-biggest field by production, and reinvested little on other deposits, Ramírez said. With Cantarell supply declining for the first time this year, Pemex must emulate state-controlled companies such as Norway´s Statoil ASA to drill in more remote areas.
“We´re worried,” Ramírez said in an interview from the 44th floor of Pemex´s Mexico City headquarters. “The problem is that today we have to begin making decisions that affect us 10 years from now.”
Congress has rejected calls by President Vicente Fox to amend the constitution to permit foreign companies to join with Pemex on concern the law change would be a step toward selling the state company to private investors.
Mexico´s next president, who takes office following July 2 elections, and Congress will grapple with one of Pemex´s biggest challenges since it was cobbled together 68 years ago from expropriated U.S. and U.K. oil companies, Ramírez said.
Crude oil today gained 53 cents, or 0.8 percent, to US$66.98 a barrel on Thursday. Prices have jumped 24 percent in the past year.
The country can choose to keep its oil industry closed and struggle to maintain supplies, or it can allow Pemex to take on partners and double oil output to 6 million barrels a day in 15 years, he said. Production now is about 3.3 million barrels a day.
“Hopefully we will not get to the point where we start seeing the effects of a reduction in production to react,” Ramírez said.
Proven reserves have fallen every year for more than a decade, leaving the country with less than 10 years worth of oil reserves at current production levels.
Pemex is now seeking to replace output at Cantarell, which contained 35 billion barrels of oil when discovered in 1976.
The field peaked in production at more than 2 million barrels a day in 2005 and will decline by 30 percent to 1.43 million barrels per day by the end of 2008, Pemex has forecast. Only Saudi Arabia´s Ghawar field is larger.
“It´s hard to compensate for a super giant field with something much less than a super giant field,” said David Shields, an independent energy industry analyst in Mexico City who published a book in October on Pemex.
Mexico´s last year of declining oil production was in 1999, after a plunge in prices the year before hurt investment.
Pemex plans to compensate for Cantarell´s decline in the next few years by developing periphery offshore fields in the Gulf of Mexico, which requires a minimum investment of US$12 billion a year, Ramírez said. The company has found that oil in the new offshore fields, such as Ku-Maloob-Zaap, isn´t as abundant and is a heavier grade than markets will purchase. Pemex´s production cost per barrel will rise to US$7.20 in 2009 from US$4.30 now as Cantarell declines, Ramírez said.
Since Fox took office in December 2000, Pemex has doubled the rate of investment in exploration and production. The effort also more than doubled Pemex´s debt to US$49 billion at the end of last year from US$22 billion.
The government takes more than 60 percent of Pemex´s revenue in taxes, leading to a net loss in 2005, a year of record profits for Exxon Mobil and Chevron Corp. In 2005, Pemex paid the government a record US$54 billion of taxes and duties on sales of US$86 billion.
Congress approved a law last year to reduce Pemex´s taxes by about US$2 billion in 2006 and by as much as US$5 billion by 2010, enabling the company to meet its investment target and keep its debt at current levels, Ramírez said.
The tax reduction is not enough, said Alexandra Parker, an analyst with the credit rating company Moody´s Investors Service in New York. The company´s liabilities are larger than its assets under U.S. accounting methods and it continues to record net losses, Parker said.
Moody´s rates Pemex at Baa1, or two levels above its lowest investment-grade rating. The ranking is the same as Mexico´s sovereign rating on the assumption the government won´t allow the company to default. On a stand-alone rating, Pemex is assigned a five on a scale of one to six, with six being the riskiest.
“It´s a weak credit quality,” Parker said. “The two major issues we see are a declining reserve base, and the liabilities continue to rise.”
The long-term solution to replace Cantarell will require investment of US$17 billion a year to tap deep-water deposits and an onshore field called Chicontepec, which now contains 40 percent of Pemex´s proven, probable and possible oil reserves, Ramírez said.
Chicontepec has remained untapped since it was discovered in 1926 because the small pockets of oil tucked in fractured rock require drilling technology that Pemex lacks. Pemex needs to spend US$38 billion over 20 years in Chicontepec to drill 20,000 wells, more than during its nearly seven-decade history, Ramírez has said. Production cost per barrel in Chicontepec will be US$12 a barrel, he said.
Pemex has drilled its first exploratory wells in deep water and announced this month it may have discovered a field with 10 billion barrels of oil. It will take up to a decade to develop the deposit, Ramírez said.
“To tackle Chicontepec and deep water, we need to have a legal framework in which we can work with other companies in strategic alliances,” Ramírez said. “To insist that Pemex alone can develop a project of this nature isn´t realistic.” read more

This website and sisters,,,, and, are owned by John Donovan. There is also a Wikipedia segment.

Houston Chronicle: World Cup drummers revive memories of Shell's steel barrels

No tin ears allowed
Bloomberg News
Royal Dutch Shell has one word to offer on the subject of its musical oil barrels. “What?” said Shell spokeswoman Alexandra Wright in London. But the World Cup is about to change Shell's tune.
“Oil drum music is infectious,” said Sepp Blatter, the president of Federation Internationale de Football Association, soccer's global governing body and organizer of the 2006 World Cup in Germany in June.
Blatter envisions the rum poured and a conga line ensuing around the 10,000 steel-drum “panmen” expected to follow the Trinidad and Tobago Calypso Carnival Warriors team.
A billion will watch
“Over a billion people will see this on television,” Blatter said. “Fantastic for Trinidad and the World Cup. The audience will go wild.”
And therein lies the corporate dilemma of Gerard Mitchell, head of Shell Trinidad Ltd.
More than a few thousand of those World Cup drummers will probably be beating Shell oil barrels.
“It's officially against corporate policy for us to hand out oil barrels,” Mitchell said. “We really don't know what to do about all this.”
For many of the world's estimated 35,000 panmen, the sweetest-sounding music comes from the 55-gallon, 20-gauge red steel oil barrels made in Shell's lubricant mixing plant on Barracones Bay in Trinidad.
A few miles up the road in Port-of-Spain, beneath the shade of the big breadfruit tree at 147 Tragarete Road, a Shell executive in 1946 made the first steel drum from an empty barrel of tractor lubricant bearing the company's distinctive clamshell insignia.
According to American jazz musician Andy Narrell, Shell oil-barrel pans made between 1946 and 1967 are as renowned and desirable as the Cremonese violins of Antonio Stradivari. Even the barrels made today are in high demand among pan players.
“We kind of have a reputation,” Mitchell said.
Added William Rosales, a Shell Trinidad engineer charged with overseeing the manufacture of more than 42,000 Shell oil barrels annually: “Let me state for the record that our used drums are disposed of properly and that Shell health and safety regulations prevent the use of empty drums for anything but Shell oil products.”
That wasn't always the case. Sixty years ago, Shell bankrolled the invention of the modern pan drum, the only new acoustic instrument to hit the music scene since Adolph Sax came up with the saxophone in 1841.
Records were lost
Shell's archivists in London and The Hague have no record of the pan or its inventor, Ellie Mannette.
Shell executives in Trinidad suspect the company's documentation for both was lost when the government nationalized the oil industry in 1974, and Shell's presence was reduced from 4,000 employees to its current 55-member operation.
Old-timers on the island say Shell got into the music business in 1951 when a Shell Caribbean managing director they remember as “Mr. Alexis” put Mannette on the payroll with an annual salary of $2,000 to stop him and his pals — Birdie, Puddin' and Cobo Jack — from stealing the company's empty and toxic oil drums.
Mannette remained with Shell until 1967, as a sales manager, steel-drum maker and leader of pan band the Shell Invaders.
“They called me Cairo,” said Mannette, now 80 and the artist-in-residence and a professor of music at West Virginia University in Morgantown. “We were teenage gang members, all viewed as social outcasts until Shell took an interest in us and our music. They gave us barrels and money and made the music happen.”
The barracuda
Mannette named the world's first 55-gallon Shell drum “the barracuda.” It was last seen in August 1946, stuck in the high branches of the breadfruit tree.
“The big kids beat me up and stole barracuda because it made a better sound than their drums,” Mannette says. “They threw it up in that tree, and I wasn't going up there for it.”
By the early 1960s, Jeff Chandler, Shell Trinidad's British managing director, and fellow Englishman Michael Smallbone were spending their off hours as managers for the Shell Invaders. The group even played at New York's Madison Square Garden.
Mannette now builds about 100 pans annually from the unsoiled barrels that roll off the line at North Coast Container Corp. in Cleveland.
“Weird thing is, nobody's really sure why a 55-gallon oil drum can be crafted into a musical instrument or why my early Shells have a distinctive sound,” Mannette said.
Back in the lab at Shell Trinidad, chemist Saira Joseph said the sound is in the solvent.
“A lighter oil would lend itself to higher notes and a heavier oil to lower notes,” Joseph explained. “The gauge of the steel is the most critical factor. Shell stayed with the heavier 20-gauge, while the other oil companies mostly went to 15- and 18-gauge steel.” read more

This website and sisters,,,, and, are owned by John Donovan. There is also a Wikipedia segment.

BBC Monitoring Service: Nigerian military confirms 30 March clash with Niger-Delta separatists

BBC Monitoring Service – United Kingdom; Apr 01, 2006
Text of report by Radio France Internationale on 1 April
Confirmation yesterday by the Nigerian army chief that a clash took place on Thursday [30 March] in Niger-Delta between government soldiers and separatists. The fighting resulted in victims. The clashes took place near a petrol production plant belonging to the Shell [oil] firm. The station had earlier sustained damages in previous fighting that was quite violent.
Source: Radio France Internationale, Paris, in French 0730 gmt 1 Apr 06
BBC Monitoring
BBC Monitoring/ © BBC. read more

This website and sisters,,,, and, are owned by John Donovan. There is also a Wikipedia segment.

Ralph Nader: An Open Letter to New Exxon/Mobil CEO, Rex Tillerson

An Open Letter to New Exxon/Mobil CEO, Rex Tillerson
The Corporate Superpower of Superpowers

April 1, 2006
Mr. Tillerson:
You have to be feeling pretty good about your new position heading the world's largest oil and gas company. You stand astride the globe where, with few exceptions, the Congress is like putty in your hands, the White House is your House and the consuming public is powerless. Governments in the Third World may huff and puff, but Exxon/Mobil pretty much gets its way in dozens of arrangements completed and about to be concluded.
Seven years ago, your predecessor, Lee Raymond, took over Exxon's main competitor, Mobil Oil Company, through a merger approved by the misnamed Antitrust Division of the Justice Department. Really, what is left of antitrust standards when the number one and number two companies in an industry are permitted to marry?
Profits of your company are beyond your dreams of avarice. Over $36 billion last year, after modest taxes, yet you blithely ignored urgent pleas by members of Congress, especially that of the powerful Chairman, Senator Chuck Grassley (Rep. Iowa) to contribute some significant deductible money to charities which help impoverished American families pay the exorbitant prices for heating oil this past winter. Rarely has there been such a demonstration of corporate greed and insensitivity by a company that has received huge government welfare subsidies, de-regulation and tax expenditures over the years at the expense of the smaller taxpayers of America.
Exxon/Mobil even relishes the latest “Big Oil's Big Windfall,” to use the phrase in a recent /New York Times/ editorial, which wrote that “oil companies stand to gain a minimum of $7 billion and as much as $28 billion over the next five years under an obscure provision in last year's giant energy bill that allows companies to avoid paying royalties [to Uncle Sam] on oil and gas produced in the Gulf of Mexico. This welfare payment at a time of record crude oil, refined oil and natural gas prices appears too much even for one of your industry's giants. A Shell official told the /New York Times/ reporter, Edmund L. Andrews, “Under the current environment, we don't need royalty relief.”
Exxon/Mobil doesn't feel any need to say something like that. You're a corporate superpower at the pinnacle of your superpowers. No Ida Tarbell, no Fred Cook, no Senator Phil Hart, no Sixty Minutes program can effectively expose you, because the company has been exposed and exposed and nothing changes your corporate policies.
Unchanged is Exxon/Mobil's stubborn refusal to pay the modest $5 billion punitive damage award following the Exxon Valdez oil spill that damaged or put so many small businesses out of business. They are still waiting, according to a recent network television expose. Last year your company made that much post-tax profits in about seven weeks. After the devastating spill in Alaskan waters, your gasoline prices rose sharply in California and you made money there. And your delay for 12 years resisting the court ordered payout by legal maneuvers has returned in interest on that award about that amount. Not that many years ago, a company in your mega-profitable position would have considered the public relations if not the simple justice benefits before dragging on the proceedings. Not so, with the impregnable Exxon/Mobil.
While BP and Shell move to build and talk about a solar power business, including wind power, you continue to parade that window dressing pittance of a project at Stanford University that is going nowhere. Your company is still seen as a resistant skeptic among a swarm of multinational companies including BP, that recognize Global Warming and its direct fossil fuel connections. To make matters worse, Exxon/Mobil has funded over three dozen organizations to undermine scientific findings about global warming or as front groups to engage in obstructionist or harassment activities.
These and other derelictions have led environmental groups to urge a boycott (See of Exxon/Mobil products and employment refusals by university graduates. Only company insiders know how effective such a boycott has been at the gasoline pump and elsewhere. My guess is that you're shrugging it off as inconsequential. The boycott clearly needs more imagination in getting its message out.
The lessons of history teach that the arrogance of corporate power eventually meets its match, either through the decay of internal hubris or the rise of public law enforcement or from private challenges-innovative, civic or competitive.
Remember, the awesome power and market position of General Motors years ago, or the dominance of IBM. When you're on top is when you should be most alert to the misuses of power that are sowing the seeds of future decline. The mean-spirited image of your company, the stinginess of transferring some of your corporate welfare windfalls to the welfare of millions of shivering children and their penurious parents are upsetting even Republican members of Congress hearing from their indignant constituents about sky high fuel prices.
So observers of your company-official and regular people-will be waiting for signs of the post-Raymond, clenched jaw era of Exxon/Mobil under the command of your group of executives. Let's see if the change is just one of style or one of more sincere responses to the ways the approaching winds are blowing.
Ralph Nader
:: Article nr. 22157 sent on 02-apr-2006 04:03 ECT read more

This website and sisters,,,, and, are owned by John Donovan. There is also a Wikipedia segment.