The threat by Ijaw militants to launch fresh attacks on oil companies in the Niger Delta area ment oil companies buckled in their plans to resume operations. More than 500,000 barrels per day remain shut in.
Fears of the continued loss of such volume of light sweet crude supply from Nigeria, also yesterday sent crude oil prices to an all time high of $71 per barrel.
THISDAY checks revealed that earlier plans by Shell Petroleum Development Com-pany (SPDC) to resume oil production from the Forcados Terminal by weekend did not materialise as workers failed to return to the facilities.
Similarly, the EA shallow water field, producing 120,000 bpd and considered to be the easiest to restart of all the Shell facilities closed down west of the Niger Delta, was still shut in.
Shell officials said yesterday that the company was yet to carry out assessment of the field.
The Federal Government put total revenue losses from the production shut in since Niger Delta militant began attacks on oil facilities, at $1.4 billion as at the end of March, 2006.
President Olusegun Oba-sanjo is expected to inaugurate today, the committee that would oversee the comprehensive development of the Niger Delta region and address the pletoral of grievances stoking unrest in the area.
However, Ijaw youths maintained yesterday their opposition to the government’s moves, warning that the resolution not to allow resumption of oil production remains until their demands are met.
The Co-ordinator of the Ijaw Youth Movement, Comrade Joseph Evah told THISDAY on phone from Warri that the youths viewed the inauguration of the committee as another ploy in the third term project of Obasanjo.
“At a time President Obasanjo should be preparing his hand-over note, he is heading a committee to develop the Niger Delta. We, the real Ijaws committed to the development of the Niger Delta will not support the committee,” said Evah.
“It is primarily to deceive the Ijaws and South south people so that they can support the third term project. One thing is clear, we know that if Obasanjo remains in power, Asari Dokubo will not be released,” he said, adding that oil companies should in their own interest stay away from the fields.
Analysts say the loss of high quality Nigerian crude will become more and more of an issue as the U.S. driving season, which begins in May, approaches.
“Light sweet crude is particularly sought after by refiners during the spring and summer as it provides a high yield of gasoline,” said Mike Wittner of investment bank Calyon.
He added the Nigerian shortfall could not be made up for by the world’s largest oil exporter Saudi Arabia, whose spare capacity is heavy, sour and more difficult to process.
Crude oil prices hit $70 a barrel yesterday, the highest level for nearly eight months, as Iran’s pursuit of its nuclear program heightened fears the U.S. might take military action against the oil-producing nation.
US light sweet crude was trading 50 cents higher at $69.80, off a session high of $70 per barrel.
The session peak was the highest since Hurricane Katrina battered oil infrastructure in the U.S. Gulf Coast and drove U.S. crude to a record of $70.85 on August 30 last year.
“The drama over Iran’s face-off with the West, the rise of insurgency in Nigeria and gasoline supply concerns in the U.S. ahead of the driving season are keeping a high floor under oil,” said Victor Shum at consultancy Purvin & Gertz in Singapore.
Ministers from the Organisation of the Petroleum Exporting Countries (OPEC) have said there is nothing more the group can do to calm the markets.
“On production there is nothing we can do. We are already producing at maximum output,” Qatar’s Oil Minister Abdullah al-Attiyah said. “There is no shortage in supply.”
OPEC, which is expected to hold informal talks later this week on the sidelines of the International Energy Forum in Doha, would probably keep oil output steady for the rest of this year if demand holds steady and prices stay high, he added.
A senior OPEC delegate also said Monday the producer group was unlikely to change current production levels “as things stand” and that supplies were adequate to cope with unexpected shortages or rising demand.