Nigeria pipeline saboteurs vow further Niger Delta attacks

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Pipeline attacks and violence have risen in the southern swampland of Africa’s biggest oil exporter since authorities issued an arrest warrant in January for a former militant leader on corruption charges.

YENAGOA, Nigeria (Reuters) – A group that claimed responsibility for a major attack on a pipeline in Nigeria’s oil-producing Delta region said it will carry out more strikes, just days after President Muhammadu Buhari vowed to crack down on “vandals and saboteurs”.

Global oil producers meeting disrupted by absence of U.S. and Iran

Attendees, including Saudi Oil Minister Ali al-Naimi, silently swept past gathered journalists at a luxury hotel in Doha ahead of the meeting.
Attendees, including Saudi Oil Minister Ali al-Naimi, silently swept past gathered journalists at a luxury hotel in Doha ahead of the meeting.

DOHA, QatarOil-producing countries met Sunday in Qatar to discuss a possible freeze of production to counter low global prices, but Iran’s last-minute decision to stay home could dilute the impact of any agreement.

The attendees, including Saudi Oil Minister Ali al-Naimi, silently swept past gathered journalists at a luxury hotel in Doha ahead of the meeting. Also on hand was Russia, another of the world’s top oil producers. The U.S., now a major producer because of shale oil, did not attend.

At least 15 oil-producing nations representing about 73 percent of world output were expected at the Doha meeting, Qatar’s energy and industry minister, Mohammed bin Saleh al-Sada, has said.

The gathering follows a surprise Doha meeting in February between Qatar, Russia, Saudi Arabia and Venezuela, in which they pledged to cap their crude output at January levels if other producers do the same.

They hope the cap will help global oil prices rebound from their dramatic fall since the summer of 2014, when prices were above $100 a barrel, though no one is talking seriously about the more dramatic step of cutting production.

Prices dropped briefly under $30 a barrel, a 12-year low, in January, but have climbed to the mid-$40s this week, boosted in part by market speculation about the Qatar meeting. Western markets were closed Sunday and not immediately affected by the discussions.

Iran decided to stay home late Saturday after saying the day before it would send an emissary to the meeting.

“We reached the conclusion that the Doha meeting is for those who want to sign the oil freeze plans, and if we wanted to have a representative at the meeting, it was to show our support of this project,” Oil Minister Bijan Namdar Zangeneh said, according to a report by the ministry’s SHANA news agency.

“But since Iran is not going to sign this, there is no need for the presence of Iran’s representative at the meeting.”

With many international sanctions lifted under its nuclear deal with world powers, Iran began exporting oil into the European market again and is eager to claw back a market share. It produces 3.2 million barrels of oil a day now, with hopes of increasing to 4 million by April 2017. On Friday, the Iranian Oil Ministry reiterated it would not join a freeze “before it brings its oil exports to the pre-sanctions levels.”

Sunni-ruled Saudi Arabia has said it won’t back any freeze if Iran, its Shiite rival, doesn’t agree to it, throwing into question whether any deal will be reached. The kingdom seems determined to ride out the low prices that could squeeze Tehran.

That dispute underscores the level of discord inside OPEC as it faces arguably its biggest challenge since the oil glut of the 1980s. Even if officials reach a deal, Iran’s production and oil from other sources, like the U.S., could keep prices down.

The meeting broke up just before 11 a.m. as attendees planned to meet with Qatar’s emir, Sheikh Tamim bin Hamad Al Thani, said Kabalan Abisaab, Ecuador’s ambassador to Qatar, who was on hand for the meeting. Abisaab said participants would return to the meeting in the afternoon and continue their deliberations.

Asked if Iran’s absence had an effect, he responded in Spanish that it “didn’t matter.”

“Believe me, everything is going well,” he said.

The biggest oil meeting in decades will take place on Sunday — here’s what you need to know

Saudi oil minister Ali al-Naimi speaks to media on his arrives for the Gulf Cooperation Council Oil Ministers' meeting in Riyadh on October 9, 2012.
Saudi oil minister Ali al-Naimi speaks to media on his arrives for the Gulf Cooperation Council Oil Ministers’ meeting in Riyadh on October 9, 2012.


Major oil players will be gathering to discuss a potential production freeze on Sunday, April 17, in Doha, Qatar, in what some analysts have called “the most important meeting of the last three decades.”

Analysts have been hoping for a coordinated move ever since mid-February, when Saudi Arabia, Russia, Venezuela, and Qatar agreed to freeze production at January levels if other producers joined in.

Since then, several states, including the relatively better-off Gulf Cooperation Council members Kuwait and the United Arab Emirates, expressed willingness to support the deal.

But others weren’t as supportive. Most notably, Iran’s oil minister, Bijan Zangeneh, previously called the idea to freeze production “a joke.

Plus, not everyone is planning to attend the Doha meeting. Libya said that it’s not going. Whether or not Iran actually shows up is a bit fuzzy after reports on Wednesday suggested that Zangeneh doesn’t plan on attending the upcoming Doha meeting, but will instead send a representative.

In light of all this, analysts aren’t exactly feeling optimistic about the meeting’s outcome.

A Macquarie Research team, led by Vikas Dwivedi, argued in a note to clients (emphasis added):

We have muted expectations for any meaningful impact on crude fundamentals from the April 17th Doha meeting. Practically, implementation of any accord that is reached would be so difficult that we view anything beyond foregoing splashy growth in 2016 as too optimistic.

The commodities-research team at RBC Capital Markets, headed by Helima Croft, also voiced doubts about the meeting’s outcome.

“As it stands now, we believe that the most likely outcome is that producers fail to close the deal and announce a freeze on Sunday, but that they instead pledge to continue to conversation and even possibly put an additional OPEC/non-OPEC meeting on the calendar for later in the year,” Croft wrote.

“Saudi Arabia and Iran do not appear ready to give sufficient ground to get a comprehensive freeze agreement done by Sunday, given current information,” she wrote.

“In order to get a breakthrough, we would likely need to see Saudi Arabia move beyond an outright insistence that Iran freeze production at current levels and/or for Iran to agree to a production ceiling that falls well short of their current 4 mb/d negotiating stance,” she continued.

But Croft also added that, given that the majority of oil producers — including Russia and the aforementioned GCC states — want a deal, their team can’t entirely rule out anything.

Even if some sort of deal is reached, however, it may not even have a huge impact.

“In the event an accord is reached, there will be very little impact on global crude supply/demand balances,” Dwivedi’s team wrote.

“The return of OPEC to country-level quotas replacing the current ‘free-for-all’ strategy is viewed as broadly positive, as is the elimination of the KSA/Iraqi production growth tail risk. However in light of the production growth already achieved in January by OPEC members and Russia, an accord will not significantly impact crude S/D balances,” they continued.

Notably, in the background of all this, it seems like global production is finally starting to cool down.

Credit Suisse’s Ed Westlake and Jan Stuart shared a chart on Wednesday showing that global oil production excluding Saudi Arabia slowed to approximately 83 million barrels per day in 2016, from about 84 million in mid-2015.

But the US Energy Information Administration‘s latest data showed that total world production is up to 96.27 million barrels per day in 2016, up from 95.76 million bpd in 2015.

In any case, analysts will be keeping their eyes and ears open for any news of possible coordination at Sunday’s meeting.

WTI crude is trading higher by 0.4% at $41.93 per barrel, and Brent crude is up 0.5% at $44.39 per barrel as of 11:52 a.m. EST.

Houston oil firm seeks bankruptcy after slump kills $5B spending spree

  |  Bloomberg
Energy XXI launched a joint venture in 2012 with ExxonMobil to explore for oil and gas in shallow waters on the Gulf of Mexico shelf.
Energy XXI launched a joint venture in 2012 with ExxonMobil to explore for oil and gas in shallow waters on the Gulf of Mexico shelf.

Energy XXI Ltd. filed for bankruptcy protection today after spending $5 billion on acquisitions in the years leading up to the crude slump.

The oil and gas explorer sought Chapter 11 protection in Houston, listing $1.8 billion in assets and $3.6 billion in debt and saying it has reached a restructuring agreement with noteholders.

“Energy XXI will eliminate more than $2.8 billion in debt from its balance sheet, substantially deleverage its capital structure and position the company for long-term success,” the company said in a statement.

Energy XXI bills itself as the largest publicly traded independent producer on the Gulf of Mexico shelf. Since its initial public offering more than 10 years ago, the Houston-based company bought MitEnergy, picked up $1.01 billion of properties from Exxon Mobil Corp. and spent $2.3 billion on EPL Oil & Gas, according to its website.

As recently as three years ago, Chief Executive Officer John Schiller was planning to expand as far afield as Southeast Asia, where he said the geology is similar to the Gulf’s.

With oil hovering around $30 a barrel, Energy XXI wound up buying back more than $1.7 billion in debt over seven months to trim its interest expense. In a February regulatory filing, the company said it doubted it could meet financial commitments over the coming year and continue operating. Crude’s recovery to about $40 since then hasn’t been enough.

Schiller, a protege of wildcatter James “Jim Bob” Moffett, had also steered the company into costly exploration projects with Moffett’s Freeport-McMoRan Inc. several miles beneath the Gulf of Mexico. Energy XXI said Schiller will continue as CEO.

The company, which plans to operate as normal during the restructuring, has about $180 million in cash and said it expects to pay suppliers and vendors in full. It asked the court for a freeze on stock transfers in order to preserve tax benefits. Energy XXI has $1 billion in “net operating losses” which help it save on federal and state taxes, according to court papers.

Oil began its slide in mid-2014 when crude was at about $100 a barrel. A glut has driven dozens of energy explorers into Chapter 11, including Magnum Hunter Resources Corp., Samson Resources Corp. and Sabine Oil & Gas Corp. Rig operators such as Paragon Offshore Plc and Hercules Offshore Inc. also declared bankruptcy as demand for their services dropped.

About 35 percent of exploration and production companies worldwide — some 175 firms — are at risk of bankruptcy this year, according to a Deloitte LLP study published in February. Together, these companies have around $150 billion in debt on their balance sheets, according to the report.

Money manager Franklin Resources Inc. was the biggest owner of the company’s second-lien bonds as of Feb. 29, with a 32.4 percent holding.

An Energy XXI subsidiary that leases subsea pipelines off the Louisiana coast remained outside Chapter 11 case and those leases remain intact, according to CorEnergy Infrastructure Trust Inc., which owns the pipe network.

The 30-year-old prince who is changing the world

| CNBC

Saudi Defence Minister and Deputy Crown Prince, Mohammed bin Salman
Saudi Defence Minister and Deputy Crown Prince, Mohammed bin Salman

A 30-year-old you may have never heard of is trying to build a company worth four Apples — and a Nike to spare.

Deputy Crown Prince Mohammed bin Salman, a fast riser in the Saudi hierarchy and member of the new generation, has the world’s ear after an expansive interview where he elaborated on his plan for taking the mega-giant state oil company public.

Bin Salman, son of King Salman, was the surprise choice to serve as deputy to Crown Prince Muhammad bin Nayef, the 56-year-old who had been seen as a possible heir apparent but is now viewed by some as more of a rival. Bin Nayef is interior minister who rose to power on his success as head of the Saudi counterterrorism program. King Salman, himself 80, took the throne when King Abdullah died in January 2015.

He stands in stark contrast to the traditional Western image of a Saudi leader — young, urbane and with views that seem far from traditional.

He is chairman of the Supreme Petroleum Council, above Oil Minister Ali al-Naimi, and he also is head of the military, and a driving force behind the war in Yemen.

“Bin Salman’s clearly trying to assert himself, and relying upon the broad degree of authority has father has assigned him,” said one U.S. official. Bin Nayef, on the other hand is seen as the more steady and tested hand, the official said.

Bin Salman has also been popular with Saudi youth, who have been supporting him through the Yemen war. About 70 percent of the population of Saudi Arabia is under 30, and 40 percent is unemployed, said Helima Croft, head of commodity strategy at RBC Capital Markets.

“That’s his constituency. … If your policy is to consolidate a significant portion of the population behind you, he’s done that. I think he’s played the ‘Game of Thrones’ in Saudi Arabia particularly well,” said Croft. “He consolidated power faster than anyone imagined. He’s talked about doing things that go to the heart of the Saudi social contract. He doesn’t seem to be afraid. How this story ends I have no idea. All I know is we’re in totally unchartered water.”

President Obama in May, 2015 in Washington with Crown Prince Mohammed bin Nayef, center, and Deputy Crown Prince Mohammed bin Salman, whose father, King Salman bin Abdulaziz, passed over older princes to put him second in line to the Saudi throne.
President Obama in May, 2015 in Washington with Crown Prince Mohammed bin Nayef, center, and Deputy Crown Prince Mohammed bin Salman, whose father, King Salman bin Abdulaziz, passed over older princes to put him second in line to the Saudi throne.

Bin Salman helped knock 4 percent off the price of crude Friday, after he threw into doubt the ability of world oil producers to agree to an output freeze at their meeting in Qatar on April 17. The prince was reported as saying the kingdom would not participate in a freeze if Iran and other major producers, both OPEC and non-OPEC, do not join the program.

“This is dead in the water then,” Croft said. “No one is going to overrule bin Salman on oil policy. If he’s going to stick to his position, there’s no point in showing up in Doha.”

The idea of a global production freeze has been supported by Russia and Saudi Arabia, through Oil Minister Ali al-Naimi. But Iran has said it has no intention of freezing output as it works to return oil to the world market, now that sanctions against it have been lifted.

“If he says it and that’s not aligned with what Naimi and other officials are saying, then those other officials are going to come into line. They have to adhere to what the leadership says. If that’s the new negotiating line that makes meeting a freeze agreement a lot more difficult than the conciliatory, and arguably, a little more constructive attitude the Saudis have had in the past,” said Michael Cohen, head of energy commodities research at Barclays. Cohen said without the freeze, and with more production from Iran, Libya, Iraq and elsewhere, it’s conceivable oil could revisit the lows from February, in the $20s per barrel.

Prince Mohammad with United States Secretary of State John Kerry, 7 May 2015
Prince Mohammad with United States Secretary of State John Kerry, 7 May 2015

Daniel Yergin, vice chairman of IHS, said the fact there is a Doha meeting at all shows the strains being felt by producers. “The number of producers going there shows you how alarmed the governments are about their finances with low oil prices,” he said.

Yergin said the freeze was not a cut in production but was meant to serve as a stabilization of world oil prices. “The deputy crown prince underlines the fact that until it’s clear where Iran’s level of production is going to settle out, that it won’t go much farther than it has. The Saudis will be at the meeting, but as so many things involving oil these days, it goes back to the rivalry between Saudi Arabia and Iran, both in the region and in terms of market share,” he said.

Bin Salman, in a five-hour interview with Bloomberg, also discussed his vision for the kingdom’s Public Investment Fund (PIF) and the sale of a public stake in the Saudi oil giant Saudi Aramco. The proceeds of the stock offering, expected next year or later, would help fund PIF which ultimately could control $2 trillion and help diversify Saudi Arabia away from oil, according to the report.

“What I’m worried about on Saudi Arabia right now is the lack of coherence of policy. Maybe he’s going to become the central messenger and he’s going to come up with a grand vision, and everyone sticks with it. But when you look at the FX (foreign exchange) drawdown and the removal of funds from foreign asset managers it raises questions,” said Croft. “I think the oil story is very important. We had al Naimi out there saying it doesn’t matter if Iran doesn’t participate. It’s kind of lurching from message to message.”

Saudi Arabia has drawn down more than $150 billion in foreign reserves to meet its budget deficit as oil cratered. It has also been issuing debt and tapping bank loans. Saudi Arabia is a very low cost producer, estimated at under $10 a barrel but it needs 10 times that to meet its budget requirements.

Prince Mohammad with Russian President Vladimir Putin, 18 June 2015
Prince Mohammad with Russian President Vladimir Putin, 18 June 2015

“He’s the top decision maker on oil. … That’s part of his brief,” said Yergin. “I think these decisions are very considered. It’s not just made up on the spot. … One of the messages is that Saudi Arabia is going this to be a bigger force in the world economy, not just in terms of oil but in terms of finance … these messages have to be seen together. This is all part of a larger program of reform and protecting the Saudi position in terms of oil.”

In the interview, bin Salman explained that Saudi Arabia would sell shares of Aramco’s parent company and turn the oil giant into an industrial conglomerate. The kingdom currently plans to sell less than 5 percent of Aramco.

“IPOing Aramco and transferring its shares to PIF will technically make investments the source of Saudi government revenue, not oil,” said the prince. He said that after diversifying investments, Saudi Arabia, within 20 years, would become an economy that does not depend mainly on oil.

Nigeria apologizes for fuel woes as frustration mounts

File photo of Nigeria's pump woes. Currently, fuel lines stretched for more than a kilometer (half-mile) on Friday in Nigeria's capital because of a fuel shortage in sub-Saharan Africa's top oil-producing country.
File photo of Nigeria’s pump woes. Currently, fuel lines stretched for more than a kilometer (half-mile) on Friday in Nigeria’s capital because of a fuel shortage in sub-Saharan Africa’s top oil-producing country.

ABUJA, Nigeria (AP) — Fuel lines stretched for more than a kilometer (half-mile) on Friday in Nigeria’s capital because of a fuel shortage in sub-Saharan Africa’s top oil-producing country.

Drivers in Abuja groaned and shouted in frustration when one station closed because it was apparently out of fuel.

Smaller lines formed outside private gas stations charging higher than the government rate, and young men lined highways waving cans of fuel that is often adulterated and damaging.

Nigeria’s oil minister, Emmanuel Ibe Kachikwu, apologized on Tuesday for the shortage which has left many travelers stranded on highways this week.

Kachikwu told the Senate that the government is “pained” by the crisis and promised to bring an end to the disruption by the second week of April. Analysts, however, say it will take longer to resolve a shortage they say is the product of longstanding refinery issues and pipeline outages.

During his Senate appearance, Kachikwu also apologized for responding to earlier questions about the fuel shortage by stating that he was “not a magician.

He said, however, that the energy problems Nigeria’s government inherited when it took over last year were “unbelievable.”

The problem lies primarily with Nigeria’s aging refineries “which are not functioning effectively even when they are well supplied,” said Charles Swabey, oil and gas analyst at London-based BMI Research.

These deficiencies have been exacerbated recently by unplanned pipeline outages that have created more uncertainty in domestic supply, Swabey said. The outages include those caused by attacks on strategic oil and gas installations in the southern Niger Delta.

Some consumers suspect some oil marketers in Nigeria are creating the shortage for profit.

“There’s fuel, they just refuse to sell it,” cab driver Muhammadu Jakawa said.

Shell Under Investigation in Italy Over Nigerian Oil Deal

Italian prosecutors are investigating Royal Dutch Shell PLC’s involvement in a Nigerian oil deal, a person familiar with the matter said, drawing the oil company into a corruption probe that has dogged Italy’s energy giant Eni SpA.

The prosecutors are investigating whether Shell’s piece of a $1.3 billion payment to acquire a rich oil field off the coast of Nigeria constituted a bribe, according to a person familiar with the probe. Italian and Dutch police last month raided Shell’s headquarters in The Hague looking for evidence that could be used in the case, the person said.

Shell on Wednesday confirmed it had received “notice of proceedings” from Italian prosecutors in connection with the Nigerian oil block and that its offices had been “visited” recently by Dutch authorities. The Anglo-Dutch company said it is cooperating with the investigators and is looking into the allegations.

Shell and Eni have jointly owned a Nigerian license, known as OPL 245, since 2011 to develop giant Atlantic Ocean oil fields thought to contain nine billion barrels of oil. It is a substantial project for the companies in a country that has been of historic importance to both of them.

Shell first pursued the oil fields in 2001, when it bought a stake from Malabu Oil & Gas Ltd.—a Nigerian company that was awarded the license when the African country was under military dictatorship. A new Nigerian government soon rescinded Malabu’s license, awarding Shell sole ownership and prompting years of legal disputes.

Malabu eventually reached a deal with the Nigerian government that gave it the license back, and attracted Eni as an investor. Shell agreed to drop its own legal challenges to Malabu’s ownership and together with Eni acquired the oil license in 2011 with a $1.3 billion payment to the Nigerian government.

Italian prosecutors are investigating where that money went and whether Shell and Eni knew its destination, according to Italian court documents.

The documents show the government later transferred almost all of the money to Malabu, and say the prosecution “believes that a considerable part of that sum was destined for the remuneration of Nigerian public officials.” Italian prosecutors aren’t investigating Malabu.

In 2014, prosecutors in Milan placed Eni and its chief executive, Claudio Descalzi, under investigation for international corruption in connection to the OPL 245 deal. Eni and Mr. Descalzi have denied wrongdoing.

Eni has always maintained that it paid the government directly and isn’t responsible for where the money eventually ended up. A Shell spokesman said that any payments for the license were made only to Nigeria’s federal government and any questions about where the money ended up should be directed to the government and to Malabu. Eni again denied any wrongdoing on Wednesday. The Wall Street Journal wasn’t able to reach Malabu for comment.

The long-running dispute over OPL 245 now threatens to cast a new cloud over Shell’s investments in Nigeria, where it has been present for 80 years and is the biggest Western investor in the country’s oil sector. Last year, Shell got nearly 10% of its output from Nigeria and the country remains a major pillar of its business even though it has sold some onshore assets in the Niger Delta in recent years that have been subject to attacks and theft.

Shell, which had already made large investments by 2011 developing the field, paid much less than half of the $1.3 billion acquisition price for a 50% stake in the oil field, according to Italian court documents. Italian prosecutors suspect most of the amount ended up being paid in bribes, potentially making Shell responsible for its part, the documents said.

Italian daily Corriere della Sera reported the investigation into Shell’s role in the Nigeria deal on Wednesday.

Three killed in oil pipeline explosion in Nigeria’s delta: environment group

File photo: Twelve people died and three were injured in an explosion during repair work at an Eni SpA crude oil pipeline in Nigeria, 2015. The victims worked on a maintenance team for a local service company, Rome-based Eni said in a statement Friday.
File photo: Twelve people died and three were injured in an explosion during repair work at an Eni SpA crude oil pipeline in Nigeria, 2015. The victims worked on a maintenance team for a local service company, Rome-based Eni said in a statement Friday.

Three people were killed and several wounded when an oil pipeline belonging to Italy’s ENI exploded during repair works in Nigeria’s southern Delta region, an environmental group said on Tuesday.

The blast was one of the worst in recent weeks in the swampland, where residents and former militant groups have long complained about oil pollution and casualties caused by pipeline accidents.

The explosion happened in the Olugboboro community in Bayelsa state on Sunday but bodies were only recovered on Monday after the fire was brought under control, residents said. Up to seven had been wounded, they said.

“The news of another tragic incident in the oil industry which claimed three lives … came to the Environmental Rights Action (ERA) as a great shock,” said Alagoa Morris, an activist at the group.

“We in ERA will not stop calling on the authorities and regulators of the oil industry to make safety and best practices the mantra of the industry, not just profit (seeking),” he said.

The group and residents said workers had been repairing the pipeline when it caught fire. There was no immediate comment from ENI.

Several bodies had been burned beyond recognition, while some injured were brought with severe burns to hospitals, residents said.

Peter Idabor, director general of the National Oil Spill Detection and Response Agency in charge of handling spills and other pipeline accidents, said safety procedures had been breached during the repair works.

“I am going to report the matter officially to the Minister of Environment today,” Idabor said.

Tensions have been building in the Delta, an impoverished region where most complain they do not benefit from oil production.

Pipeline attacks by militants and other residents have been on the rise since authorities issued in January an arrest warrant for a former militant leader for corruption charges.

In 2009, the OPEC member brokered a multi-million amnesty for militants who ended blowing up pipelines to demand a greater share of the country’s oil wealth and an end of oil pollution.

President Muhammadu Buhari, elected a year ago, has extended the amnesty, but upset former militant leaders by ending generous pipeline protection contracts.

BP: The US will be energy independent in 5 years

BP_The_US_will_be-1c3ada13a10ada100bbad0f7f73a5906

By Bob Bryan  |  Business Insider

As a global supply glut continues to keep oil prices at their lowest levels in years, it seems that everyone is focused on the future of the commodity.

In its 2016 energy outlook, the oil giant BP predicted that the US would be “energy self-sufficient” by 2021 and oil self-sufficient by 2030.

Oil is used for products beyond just power, such as plastics, which is why oil independence would come shortly after energy independence.

According to the report, much of this independence will be a function of a global shift, an adoption of more renewable energy, and the growing impact of shale drilling.

“The big winner in the ‘faster transition’ case is renewables, with an almost six-fold increase in output (nearly 9% p.a.) and a 15% share of energy by 2035,” the report said. “The rate at which renewables gain share from 2020 to 2035 matches oil’s gain over the 15 years of 1908-23 — years that included the Texas oil boom, the discovery of oil in the Middle East, the British Navy switching to oil, and the Model T Ford starting mass motorization.”

Despite this, BP said that oil consumption would be driven mostly by emerging economies and that natural-gas consumption would continue to climb.

The company also made numerous other huge predictions, including:

  • “EU energy demand in 2035 is back to where it was 50 years earlier, despite the economy being almost 150% bigger.”
  • “By 2035 coal accounts for less than 25% of primary energy, its lowest share since the industrial revolution.”
  • Renewables account for a quarter of global primary energy growth out to 2035, and over a third of the growth in global power generation.
  • “China adds more renewable power over the Outlook than the EU and US combined.”

BP said the biggest danger to the downside for its outlook is slower-than-expected gross-domestic-product growth; and to the upside it suggested the possibility of a quicker-than-projected adoption of renewable energy.

Shell being sued in two claims over oil spills in Nigeria

_80099293_024973534-1

■ The local fishing community in Nigeria’s delta region have been hardest hit by recent oil spills

Oil giant Shell is being sued in London for the second time in five years over spills in the Niger Delta.

Two communities are claiming compensation and want Shell to clean up their land.

Shell said it is at an “early stage” in reviewing the claims and that the case should be heard in Nigeria.

The Ogale community of about 40,000 people in Rivers State, on the coast of Nigeria, who are mainly farmers or fishermen, are some of the claimants.

Their case is being handled by law firm Leigh Day.

Spills since 1989 have meant they don’t have clean drinking water, farmland or rivers, their claim says.

It points to a November 2015 report by Amnesty International which says four spill sites Shell says it planned to clean up are still contaminated.

The first court hearing at the Technology and Construction Court, held on Wednesday, found that the claimants can can lodge a case against Shell’s Nigerian business, known as Shell Petroleum Development Company of Nigeria (SPDC). Shell declined to comment on the ruling.

Clean-up plan

Amnesty’s findings followed a 2011 report by United Nations Environment Programme (UNEP) which found water contaminated with oil by-products including benzene, thought to be a carcinogen. It suggested a clean up, but said a “sustainable recovery” of the area could take up to 30 years.

Shell says it has agreed a clean-up plan.

“In mid-2015 SPDC JV, along with the government, UNEP and representatives of the Ogoni community, agreed to an 18-month roadmap to fast-track the environmental clean-up and remediation of Ogoniland which includes a governance framework,” it said in a statement.

The Bille community, who are mainly fishermen and are the other party to sue, claims Shell should be liable for “failing to protect their pipelines from damage caused by third parties”, according to Leigh Day.

Theft

Pipelines in the area have been targets for thieves who steal crude oil and try to refine it locally. This has lead to more spills and damage though explosions.

“Both Bille and Ogale are areas heavily impacted by crude oil theft, pipeline sabotage and illegal refining which remain the main sources of pollution across the Niger Delta.

“Ogale is in Ogoniland and it is important to note that SPDC has produced no oil or gas in Ogoniland since 1993. Access to the area has been limited following a rise in violence, threats to staff and attacks on facilities,” Shell said.

Settlement

But the communities say Shell pipelines lack the technology to detect and shut off leaks, whatever the cause.

Daniel Leader, partner at Leigh Day said: “It is scandalous that four years after the UNEP Report Shell is yet to clean up its oil in either Ogale or Bille. Our client’s patience has now run out and we intend to force Shell to act since it is clear they have no intention of doing so on their own.”

In January last year, Shell agreed to an $84m (£55m) settlement with residents of the Bodo community in the Niger Delta for two oil spills.

The same law firm, Leigh Day, said their 15,600 clients would receive $3,300 each for losses caused by the spills.

The remaining $30m would be left for the community, which Leigh Day said was “devastated by the two massive oil spills in 2008 and 2009”.

That dispute began in 2011.

During the trial emails, letters and internal reports submitted to a court in London, and seen by the BBC, showed that senior Shell employees were concerned before the spill that Shell’s pipelines in the area had reached the end of their lives and needed replacing to avoid danger to lives, the environment and the economy.

Two spills in 2008 affected about 35 sq miles (90 sq km) in southern Nigeria, according to the Bodo community which sued Shell.

Shell said at the time it “dismisses the suggestion that it has knowingly continued to use a pipeline that is not safe to operate”.

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