AP | Jan. 15, 2012, 12:24 AM
ABUJA, Nigeria (AP) — Nigeria’s government and labor unions failed Saturday night to end a paralyzing nationwide strike over high gasoline costs, potentially sparking an oil production shutdown in a nation vital to U.S. oil supplies.
It was not immediately clear early Sunday whether a major oil workers’ union had gone ahead with its threat to have its members walk off their jobs starting at midnight in an effort to halt oil production.
Nigeria, which produces 2.4 mi lion barrels of oil a day, is the fifth-largest oil exporter to the United States. Any disruption to oil production could roil the oil futures market at a time traders remain concerned about world supply.
President Goodluck Jonathan did not show up for a meeting with union representatives held Saturday night at the presidential villa in Nigeria’s capital Abuja, nor did Vice President Namadi Sambo. Instead, the nation’s Senate president and its House speaker represented the government along with other officials.
After the meeting, Nigeria Labor Congress President Abdulwaheed Omar told waiting journalists: “We have not reached a compromise.”
Asked whether oil production would immediately halt, Omar said: “We are taking these things gradually.”
Nigeria has been gripped by a paralyzing strike since Monday when labor unions called the nationwide work stoppage in response to a government decision to remove subsidies, causing fuel prices to more than double in Africa’s most populous nation. However, oil workers mostly remained on the job.
On Thursday, the Petroleum and Natural Gas Senior Staff Association of Nigeria threatened to stop all oil production in Nigeria at midnight Saturday. President Babatunde Ogun and other union officials were not immediately available to confirm whether its members had left their posts.
The union’s ability to enforce a shutdown across the swamps of Nigeria’s southern delta to its massive offshore oil fields remains in question. But the threat of a strike caused jitters on global oil markets Friday.
The strike began Monday, paralyzing the nation of more than 160 million people. The root cause remains gasoline prices: President Goodluck Jonathan’s government abandoned subsidies that kept gasoline prices low on Jan. 1, causing prices to spike from $1.70 per gallon (45 cents per liter) to at least $3.50 per gallon (94 cents per liter). The costs of food and transportation also largely doubled in a nation where most people live on less than $2 a day.
Anger over losing one of the few benefits average Nigerians see from being an oil-rich country, as well as disgust over government corruption, have led to demonstrations across this nation and violence that has killed at least 10 people. Red Cross volunteers have treated more than 600 people injured in protests since the strike began, the International Committee of the Red Cross said Friday.
Even if strikers are only partially successful, fears of tightened global supplies could raise oil prices by $5-$10 per barrel on futures markets next week. Gasoline prices would follow, rising by as much as 10 cents per gallon and forcing U.S. drivers to spend an additional $36 million a day at the pump.
Experts predict the national average in the U.S. could rise as high as $4.25 per gallon ($1.12 a liter) in 2012.
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- Nigerian strike talks fail to reach fuel price deal – Reuters (reuters.com)
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Nigerian union members and demonstrators march in Lagos to protest the removal of petroleum subsidies by the government on January 3, 2012. Nigerian police fired tear gas to disperse a small crowd burning tires in Lagos and arrested demonstrators in the northern city of Kano on Tuesday as protests continued over soaring fuel prices. (Pius Utomi Ekpei /AFP/Getty Images)
Over the weekend, Nigerian President Goodluck Johnathan said the violence that has erupted from Islamist militant group Boko Haram, is the gravest threat since the civil war in 1967 to 1970 that left as many as 3 million people dead, and nearly ripped the country apart, according to Agence France Presse.
“During the civil war we knew and we could even predict where the enemy was coming from. But the challenge we have today is more complicated,” Jonathan said, according to The Guardian. The president said some Boko Haram supporters even work for the government.
As the Nigerian government attempts to counter this threat, however, the country appears to be descending into chaos. On the first of this year, the president announced an end to government-sponsored fuel subsidies, doubling and tripling the price of gas in a matter of days.
The reaction of the people was swift, as people took to the streets in opposition to the move almost immediately. Yesterday, schools, banks and stores were shuttered, as protests and a general strike swept the nation after an emergency court banned the demonstrations on Sunday, according to Bloomberg News.
The BBC reports at least three people were killed and more than 30 injured in the protests, that drew tens of thousands of people, and are scheduled to continue indefinitely.
CNN reports a higher death toll, citing at least five reported deaths. Hadiza Halliru, an Abuja protester told the broadcaster that soaring fuel prices have caused an increase in the costs of everything from food to school fees. In Nigeria, more than 90 percent of the people live on less than $2 a day.
“The fuel hike, which has doubled and even tripled in some states, would affect not only transportation but the price of foodstuff, clothing, any form of direct labor, construction costs,” he told CNN. “But salaries still remain the same, which means everyone who directly pays bills will be affected, especially the middle class and the poor.”
In a photo on the Voice of America website, one man carries a placard that reads: “One day the poor will have nothing to eat but the rich.”
The fuel subsidy cost the government $8 billion in 2011, and some argue it never really helped the average Nigerian person get ahead. Critics of the subsidy say it filtered large amounts of money into the hands of the few, leaving the country with very little in the way of infrastructure development.
As the debate over the subsidy raged last fall, a Nigerian Tribune editorial hailed local leaders for standing up to the people profiting from the subsidy. The author, Joshua Ocheja, writes:
“We can’t sit and watch while an infinitesimal percentage of the population milk us dry in the name of fuel subsidy … It is high time we called a spade a spade in this country. Our elected officials must account for their actions and inactions as it concerns the populace.
- Burning roadblocks at 2nd day of Nigeria strike (mysanantonio.com)
- Nigeria On the Verge of Chaos As Thousands Strike Over Rising Fuel Prices (clutchmagonline.com)
- Government: Ongoing Nigeria strike invites anarchy (seattlepi.com)
- Nigeria in turmoil (zxeesha.wordpress.com)
|This week the SubseaIQ team added 1 new projects and updated 16 projects. You can see all the updates made over any time period via the Project Update History search. The latest offshore field develoment news and activities are listed below for your convenience.|
- Ophir Begins with Drilling Operations Offshore Tanzania (mb50.wordpress.com)
- Angola: Azul-1 Deepwater Well Brings Oil to Maersk Oil (mb50.wordpress.com)
- USA: Saratoga, McMoRan in Vermilion 16 Field JV Talks (mb50.wordpress.com)
Pacific Drilling S.A. today provided an update on the status of its ultra-deepwater drillships. The Pacific Bora commenced its three year contract with a wholly owned Chevron subsidiary on August 26, 2011, and continues to operate in the Agbami Field in Nigeria. The rig has reached performance levels in line with industry expectations.
In addition, following previously announced repairs and upgrades, the Pacific Scirocco is mobilizing from quayside in Port Ngqura, South Africa, to Nigeria, where it is expected to commence a one year contract with Total E&P Nigeria Limited in December 2011.
The Pacific Santa Ana will complete upgrades prior to expected delivery in December 2011, before mobilizing to the US Gulf of Mexico for a five year contract with Chevron as the world’s first dual gradient drilling rig.
The Pacific Mistral arrived in Rio De Janeiro, Brazil, on November 21, 2011. The rig will now undergo regulatory approvals and acceptance testing with its client, Petrobras, prior to beginning operations, which are expected to start in December 2011.
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- Fred Olsen Wins Contract for Belford Dolphin and Newbuild Drillship (gcaptain.com)
- Ocean Rig Bidding to Rent 5 Drillships to Petrobras, Brazil (mb50.wordpress.com)
- Drillship animation in the Gulf of Mexico (video) (mb50.wordpress.com)
- South Korea: Naming Ceremony for Odfjell Drilling’s New UDW Drillship (mb50.wordpress.com)
- Inauguration of Noble Globetrotter I at Schiendam, the Netherlands (mb50.wordpress.com)
- Deepwater Millenium Drillship Not Moving to Brazil. Stays in Ghana (mb50.wordpress.com)
Government of Yement today informed Nexen that the company’s application to extend the Block 14 (Masila) Production Sharing Contract has not been accepted, and that a newly Yemen national company will take over the operatorship of the block upon the PSC expiry on December 17.
Marvin Romanow, Nexen’s President and CEO said: “While we’re disappointed we did not receive an extension, we’re proud of the accomplishments we’ve achieved there. Our operations at Masila have generated significant value for our company, enabling us to deploy the cash flow to build our current portfolio of legacy assets.”
Nexen explained on its website that decrease in the company’s all round production volumes as a result of the contract expiry will be reduced by the start-up of the Usan project, offshore Nigeria, which is expected to begin production in the first half of next year.
The Usan field was discovered in 2002 and is located some 100 kilometers offshore in water depths ranging from 750 to 850 meters. The field development plan includes a floating production, storage and offloading (FPSO) vessel with a storage capacity of two million barrels of oil.
- Nexen Inc. could see end of Yemeni operations – Calgary Herald (calgaryherald.com)
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- Yemen Crisis Situation Reports: Update 107 | Critical Threats (theromangate.wordpress.com)
- Nexen’s $3.3-billion North Sea project gets approved (calgaryherald.com)
- Nexen’s profit up slightly, cuts 2011 production (business.financialpost.com)
Fairmount Marine, a Dutch marine contractor for ocean towage and heavy lift transportation, announces that its powerful tug Fairmount Glacier has successfully assisted the new build semi submergible drilling rig Scarbeo 9 sailing around Cape of Good Hope.
Fairmount Glacier was contracted to sail towards a meeting point offshore South Africa where she met with Scarabeo 9 and escorted her safely around the Cape of Good Hope. Despite the bad weather encountered during the route, the convoy proceeded at an average speed of 4.5 to 5.0 knots.
The semi submersible drilling rig Scarabeo 9 has a length of 115 metres, is 80 metres wide and her depth – from keel to main deck – is 35 metres. After they had safely cleared the South African Coast, the Master of Scarabeo 9 thanked Fairmount Glacier for her continued support throughout the voyage. The Fairmount Glacier returned to Cape Town.
- Fairmount Marine Brings Ocean Yorktown Rig in U.S. Gulf of Mexico (mb50.wordpress.com)
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- Anti-Castro Cuban Americans Fret Over Drilling Rig (mb50.wordpress.com)