Archive for the 'Nigeria' Category

Terrorists targeting oil infrastructure

Thursday, June 26th, 2008

Back in 2003, Gal Luft and Anne Korin wrote: “However, after the attacks on World Trade Center and the Pentagon, symbols of U.S.’ economic and military dominance, terrorist organizations of global reach like al Qaeda have identified the world’s energy system as a major vulnerability and a certain way to deliver a blow to America’s oil dependent economy as well as global economy at large. With attacks against transportation networks, military bases and government installations becoming more difficult to execute due to heightened security, terrorists looking for a big bang might find oil, to quote al Qaeda, the “umbilical cord and lifeline of the crusader community,” the object of the next major assault on the west, an assault that could wreak havoc with America’s economy and way of life. ”

Fast forward to the present, where attacks on oil targets have removed a significant amount of oil from the global market contributing to the drastic rise in prices. The likelihood of a catastrophic attack against a hub of the global oil market is high. AP reports: “Saudi authorities arrested 701 suspected al-Qaida-linked militants in 2008, some of whom planned a car bomb attack on an oil installation, the Interior Ministry said Wednesday.” The threat extends beyond the Middle East: Nigeria, for example, has lost almost one million barrels a day of production due to attacks, the most recent of which were last week.

Trouble in Nigeria removes 1 million barrels of oil a day from the global market

Friday, April 25th, 2008

Terrorist attack on a key pipeline plus a workers strike has removed 1 mbd of Nigerian oil – 40% of the country’s usual output – from the market:

Oil production by ExxonMobil Corp.’s local subsidiary Mobil Producing Nigeria Unlimited has been cut by 90% or nearly 780,000 b/d due to the strike by MPN workers, according to George Sola Olumoroti, Mobil branch chairman of the Petroleum and Natural Gas Senior Staff Association of Nigeria (Pengassan). [...]

Meanwhile, Nigeria’s main militant group—the Movement for the Emancipation of the Niger Delta—said it attacked a crude oil pipeline operated by Royal Dutch Shell PLC in Rivers state, in southern Nigeria, on Apr. 24.

Shell confirmed the Nigerian militants’ claim through community contacts, saying the installation affected is located around Kula in the eastern Niger Delta. Shell was forced to shut in 170,000 b/d of production as a result of the attack.

Following the assault, Shell was forced to declare that it would not be able to meet its contractual obligations for crude deliveries in May from its 400,000 b/d Bonny field.

MEND said it will continue to attack oil installations in the country in its effort to gain a greater share of Nigeria’s revenues from oil, much of which lies in the southern Niger Delta.

More on MEND here.

Nigerian rebels step up war against oil infrastructure

Friday, January 11th, 2008

MEND denotated a remote control bomb on an oil tanker in Nigeria today, continuing its attacks against Nigeria’s oil infrastructure. WSJ has an email from MEND here.
Set America Free’s Anne Korin discussed MEND on ABC News last January. Watch here.

Nigeria is a prime example

Wednesday, January 31st, 2007

of the natural resource curse. Corrupt government officials in oil rich Nigeria are siphoning off the many billions of dollars the country has received in oil income. Example in a recent Human Rights Watch report: “One local government chairman habitually deposited his government’s money into his own private bank account. Another has siphoned off money by allocating it towards a ‘football academy’ that has not built.” 

There’s more:

The report documents how revenues flowing into local government treasuries in recent years have been grossly misallocated or stolen outright. Many local governments have lavished funds on new government offices and other massive construction projects that dwarf spending on health care and education. One local government dedicated only 2.4 percent of its revenues to maintaining its crumbling primary school infrastructure while spending 30 percent of its budget on salaries and expenses for the offices of its chairman and legislative councilors. Some local government chairmen have set aside more money for their own travel and “miscellaneous expenses” than they allocate to the schools and health clinics they are charged with running.  
 
As one embittered resident put it, “All they do is build their headquarters, massive things, air-condition them, and buy vehicles to drive around in.”  
 
Significant revenues are also lost to apparent theft. One local government chairman spent huge sums on a series of non-existent projects, including a “demonstration fish pond” with neither water nor fish and a “football academy” that has never been built. Another set aside funds in the local government budget to pay more than 100 “functional committees/protocol officers” whose responsibilities, if any, were entirely unclear; their total salaries exceeded those of all the local government’s health sector employees. One local government’s chairman was shown by a judicial inquiry to have illegally awarded lucrative contracts for maintenance and other work to himself, in some cases for services he then failed to deliver.  

Disgusting.

Nigeria’s problems don’t end there, and include the rise of radical Islam, ethnic conflict, and attacks against the oil industry.

Nigeria’s oil war

Tuesday, January 9th, 2007

Watch Anne Korin discuss on ABC’s Nightline the destructive impact Nigerian terrorist group MEND is having on the country’s oil industry.

Oil worker killed in Nigeria

Wednesday, November 22nd, 2006

Another kidnapping of foreign oil workers in Nigeria this morning, part of a continuous assault against the oil industry in the country. Seven hostages were taken. The rescue effort tragically ended with the death of an oil worker and wounding of another.

And again: oil workers kidnapped in Nigeria

Thursday, November 2nd, 2006

AFP reports that an American and a Briton working for Norwegian oil services firm Petroleum Geo-Services (PGS) were kidnapped by a group of armed men in Nigeria’s oil-rich Niger Delta region. Nigeria is one of the most important suppliers of oil to the U.S. and the largest producer in Africa.

China: Oil at any cost

Monday, October 30th, 2006
China’s Sinopec sees crude imports rising 21% this year
According to Zhang Yuqing, deputy head of the Chinese National Reform and Development Commission (NRDC)’s energy department China imported 38.34 million tons of crude oil from Africa in 2005, accounting for 30 percent of its oil imports.
In 2005, Saudi Arabia was China’s largest source of crude oil, followed by Angola. Four African countries, namely, Angola, Sudan, Congo and Equatorial Guinea, were among the top 10 oil exporters to China in 2005. By the end of 2005, China had invested in 27 major oil and natural gas projects in 14 African countries, including Sudan, Algeria, Angola and Nigeria. Zhang said the government will encourage Chinese firms to expand their cooperation with African countries in the energy sector. (China Daily)

“China’s fast-growing economy has created a deep thirst for oil that has pushed it to do business with some of the most corrupt and dangerous regimes on Earth, several of them in Africa. [...]

“Beijing’s guiding philosophy of noninterference with the affairs of other nations, and its growing financial involvement in the developing world, are having an overwhelmingly negative effect on stability and human rights. Setting aside China’s stonewalling on efforts to crack down on nuclear threats posed by Iran and North Korea, its reluctance to impose tough sanctions on Sudan (where it has significant oil interests) is contributing to the ongoing murder, rape and displacement of hundreds of thousands of people in the Darfur region.[...]

“Chinese banks haven’t signed on to the Equator Principles, a voluntary set of environmental and human rights guidelines adopted by 80% of the world’s commercial lenders. This makes it easier for Chinese banks to do business with corrupt government officials. “

Meanwhile, in the Persian Gulf:

“the importance of energy cannot be underestimated when examining Sino-Arab relations. China is the world’s second-biggest energy consumer and third-biggest importer. Its oil consumption surpassed Japan’s in 2003 and now stands at 6.5 million barrels per day, compared to 20 million barrels per day for the US. [...]

“Today, 58 percent of China’s oil imports come from the Middle East, mostly from the Gulf. China has adopted a strategy of geographical diversification by investing in foreign oil and gas fields in more than 20 countries including Venezuela, Nigeria and Australia. But diversification away from the Middle East has its limits. Two-thirds of proven oil reserves are located in the region, mostly in the Persian Gulf. Similarly, many of the oil reserves in non-Middle Eastern countries are rapidly being depleted. The I.E.A. predicts that Chinese oil imports from the Middle East will rise to at least 70 percent by 2015, underpinning that the future of the Chinese economy is inextricably tied to the Middle East. [...]

“China has the closest relations with Saudi Arabia, the world’s largest oil producer. China is now Saudi Arabia’s fourth-largest importer and fifth-largest exporter. Saudi Arabia is China’s biggest oil supplier, accounting for almost 17 percent of China’s oil imports. Trade between the two has grown an average of 41 percent a year since 1999, according to the Chinese Ministry of Commerce.

“Saudi Arabia’s oil exports to China increased to some 500,000 barrels per day in 2005, up from 440,000 barrels in 2004. This is set to increase further after Saudi oil giant Aramco agreed to provide the China Petroleum and Chemical Corporation (Sinopec) with 1 million bpd by 2010. Abdallah Jum’ah, president of Aramco, described China and Saudi Arabia “as among the most important energy relationships on the planet.”

“In April of this year King Abdullah became the first Saudi king to visit China. This was Abdullah’s first trip outside the Middle East since ascending to the throne in 2005, potentially signaling a new strategic alignment. During the three day visit, King Abdullah told Chinese legislative chief Wu Bangguo that Saudi Arabia considered China a “truly friendly country” and hoped that their relations would become “better and better.”

“The summit saw the signing of five agreements, including a landmark pact for expanding cooperation in oil, natural gas and minerals. Saudi Arabia also granted China a loan to improve infrastructure in China’s oil-rich Xinjiang region and offered Chinese companies investment opportunities in Saudi’s enormous infrastructure sector. “

We’ve been beating on this drum for a while. Further reading:

The Sino-Saudi Connection

U.S., China Are on Collision Course Over Oil

Fueling the dragon: China’s race into the oil market

China’s oil rush in Africa

Chinese Quest for Crude Increases Focus on Africa

As Set America Free’s Anne Korin said to UPI:

“‘We don’t want to see it escalate to a resource conflict’ [...] The Set America Free Coalition says the best solution is to help China help itself [..] allowing Beijing to be steered away from its oil dependence.

“‘In the same way (developing countries) skipped wires by going right to wireless, they could leapfrog oil and go right to alternative energy sources’”

And the U.S. should lead by example.

Nigeria: 800,000 oil barrels/day shut in

Friday, June 9th, 2006

Attacks against oil infrastructure have shut in 800,000 barrels of oil per day in Nigeria. Tony Chukwueke, director of Nigeria’s Department of Petroleum Resources, said “This is a huge loss to Nigeria and we don’t know what to do about it.”

Meanwhile, another top Iraqi oil industry official was kidnapped yesterday.