Nigerian Insurrection And The Oil Market

Discussion in 'Current Affairs, News and Analysis' started by Not_Whistlin_Dixie, Feb 21, 2006.

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  1. Light sweet crude is back up over $60/bbl. It's widely known that the Iran situation is introducing a "war disruption" premium into the price. Perhaps less well known is a guerilla warfare campaign within the borders of another important producer, Nigeria.

    From the New York Times via the Australian Financial Review:

    Tensions in the oil-rich Niger Delta, which have sent world oil prices up sharply, have flared since Saturday after militants kidnapped nine foreign oil workers, set pipelines on fire and disrupted a major export terminal in the latest series of clashes between local ethnic groups and the Nigerian central government.

    As a result of the attacks, Nigeria's oil production has been cut by 455,000 barrels a day out of a total of about 2.5 million barrels, according to Royal Dutch Shell, the main foreign producer in Nigeria.

    A major oilfield was shut down as a precaution, Shell said.

    ...

    Nigeria is the fifth-largest oil exporter to the United States, after Mexico, Venezuela, Canada and Saudi Arabia. Nearly half of Nigeria's oil exports go to the US.


    "Militants slow Nigeria's oil output" by Jad Mouawad. 22 February 2006
    http://afr.com/articles/2006/02/21/1140284060855.html

    These developments coincide with heightening tensions between the US government and another important supplier to the US market, Venezuela.

    I consider it possible that a great shock, consisting of a significant shortfall in crude oil availability, will hit the US economy soon.
     
  2. as I read this I am waiting for my plane to go down to nigeria, I have worked there for 2 years, don't believe everything the press tell you. yes there is trouble but it is confined to one area. the rest of the country is fine.
    the oil industry will jump at any opportunity to raise the price.
     
  3. Man you got that right. Condi came out of the oil industry. Now she's trading verbal shots with Chavez. The suspicion occurs to me that both are beholden to interests that expect to benefit from anything that makes the price go up.

    Their recent acrimony might correspond to reality in the same way and to the same degree as professional wrestling. ("You disrespected my woman and you disrespected me, Iron Sheikh! Now I'm going to kick your @##!!!")
     
  4. I've worked there too, and have a pretty good idea what's causing much of the problem. If Shell, ExxonMobil etc, together with the awful Government were to put back into the local economy one thousandth of what they're taking out (and the local people know how much that is), the anger against them would shrivel. They don't; the profits end up far from Bonny River and Port Harcourt, and the delta gets spillage.

    Even as a security consultant with one of the majors, with a remit to do what I could to defend the comapany against these sorts of attack, I had a great deal of sympathy for the 'opposition', and the fact that nothing positive seems to have been done in the few years since then makes me even more cynical about those companies and their motives. The government? It's African.
     
  5. I found this earlier today:

    news.yahoo.com/s/cpress/20060221/ca_pr_on_wo/nigeria_sectarian_violence

    It was eventually going to start somewhere.
     
  6. I thought it had started in Iryian Jaya? Oh and Darfur , which we seem to be studiously ignoring.

    I don't think it's the first time Nigeria have had dramas like this either.

    Good point re. co-incidental happenings though. Most strange.
     
  7. Cool beans.Thats where my parents come from, a small town called Abonema which is 30 mins out by speed boat.I support the opposition guys and i just hope all the foreign oil guys can get out of there in time.
     
  8. There must be loads of unrealised capital out there....I get emails just about every day offering me the opportunity of a lifetime and my share of Nigerian oil money. Hurrah!