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UPI Energy Watch

Sept. 18, 2008 at 10:43 AM   |   Comments

Nigerian militants shut down oil production again

The Nigerian militant group Movement for the Emancipation of the Niger Delta has been attacking oil and gas plants, refineries, pipelines and exploration fields for the last five days almost non-stop, the Irish Examiner reported.

The violence in Nigeria has been enough to push crude oil prices slightly up around $90 a barrel before closing Wednesday.

More than just disrupting production, close to 1 million barrels a day, oil industry leaders suggested that the attacks may have resulted in more than 100 deaths.

Since the beginning of MEND in 2006, the group has disrupted oil flow, cutting around 40 percent of the Niger Delta's oil and gas production. The easily refinable crude oil is exported mostly to Europe and the United States.

MEND has said it will not cease the attacks until more control of the oil wealth in the Delta region is handed over to the local people.

The most recent attacks hit a pipeline operated by Royal Dutch Shell and Italy's Agip after the rebels declared a "war on oil" last week. According to the Irish Examiner, the attack was the third on a Shell facility within 48 hours. U.S. Chevron also has reported being affected by attacks.

MEND allegedly threatened that the next targets would be Nigeria's offshore oil rigs.


ExxonMobil to invest in Indonesia

U.S.-based ExxonMobil's Indonesian arm, ExxonMobil Indonesia Inc., announced Thursday it will invest $450 million in oil and gas exploration. The focus will be on two blocks in the West Sulawesi province, according to the company.

The two blocks -- Mandar in Polewali Mandar regency and Surumana near Dongala regency -- contain an estimated 1 billion barrels of oil equivalent reserves, Chinese news agency Xinhua reported.

After a rig is contracted, which is expected to cost about $70 million, drilling can begin. That is expected to happen by December.

Indonesia currently produces about 927,000 barrels per day and is working to expand and increase its oil production. The country's leaders are looking for new exploration fields as well as ways to build additional infrastructure.


India's ONGC Videsh is getting less oil in Russia

OVL, the overseas arm of India's Oil and Natural Gas Corp., said reserves are on the decline at its Sakhalin I oil field in Russia's Far East and it will lose about 15 percent of its crude from the field, the Business Standard reported.

OVL has a 20-percent stake in the field and is currently pumping about 190,000 barrels per day, of which India gets 38,000. Now the oil India gets is expected to drop to 32,000 barrels per day next year.

The cut will hurt, as India is still suffering from fairly severe electricity and fuel shortages. The resources in the country have not been able to keep up with growing demand.

OVL paid $1.7 billion for a 20-percent stake in Sakhalin I, which reached a peak production of 250,000 barrels in February 2007. But OVL reportedly has 38 oil and gas assets in 18 countries and produces about 176,000 barrels per day.

The joint owners and operators of the Sakhalin I field have said that they will continue with production and in 2010 will start using enhanced recovery efforts to try to recover more oil. The other stakeholders include Exxon with 30 percent, Russia's Rosneft with 20 percent and Japan's Sakhalin Oil and Gas Development Co. with 30 percent.

--

Closing oil prices, Sept. 18, 3 p.m. London

Brent crude oil: $89.94

West Texas Intermediate crude oil: $94.60

--

(e-mail: energy@upi.com)

Topics: Brent Crude
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