13:45 DJS Analysts Say Nigerian Actions Seen As Move To Improve Oil Sector
13:45 DJS Analysts Say Nigerian Actions Seen As Move To Improve Oil Sector
LONDON -(Dow Jones)- Nigerian military ruler Abdulsalam Abubakar's
decision over the weekend to temporarily eliminate the post of oil minister
may herald a concerted effort to improve the country's beleaguered downstream
oil sector, analysts said Monday.
Rather than reappoint Oil Minister Dan Etete to his new cabinet,
Abubakar has opted to oversee oil policy through a special adviser to a new
Directorate of Petroleum Resources.
Abubakar is expected to appoint Dalhatu Bayero, managing director of
the Nigerian National Petroleum Corp., as his special adviser, according to
industry sources. An oil minister is expected to be reappointed after the
promised return to civilian rule by next May.
Charlie Weeks, Africa analyst at political and security risk
consultancy Control Risks Group, says Abubakar would probably like to
personally direct government attempts to improve the country's downstream
sector, which includes refining and marketing activities.
The sector has been plagued by fuel shortages because of the country's
dilapidated refineries and cross-border smuggling, says Leo Drollas, chief
economist at the London-based Centre for Global Energy Studies.
Under a scheme approved by Abubakar, four multinational oil companies
operating in Nigeria - Royal Dutch/Shell Group, Agip SpA, Elf Aquitaine SA
(ELF) and Mobil Corp. (MOB) - have been asked to import larger quantities of
refined products.
Industry sources said the government has refused to pay for some
shipments contracted under the previous regime, saying the prices were too
high and some material failed to meet specifications.
Weeks said Abubakar is also looking to address corruption seen in the
oil industry under the rule of his predecessor, Sani Abacha, who died in June.
Nigeria's upstream sector - or exploration and production - is
considerably more efficient than the downstream, with production-sharing
agreements with foreign companies generally operating efficiently. But
production stoppages as a result of localized unrest in the oil producing
areas and spills continue.
Shell Nigeria shipments from Bonny and Forcados have been subject to
force majeure since Saturday. A force majeure protects oil companies from
legal action when they are unable to meet delivery schedules for reasons
beyond their control.
Nigeria's share of oil production within OPEC has increased since 1990,
noted Drollas. Nigeria produced 2.15 million barrels per day of crude in July
1998, according to a survey of secondary sources by OPEC.
The new Nigerian cabinet was sworn-in Saturday but will only last until
the civilian handover. Among the key positions, Ignatius Olisemeka, who served
as ambassador to Washington and Tel Aviv, has been appointed foreign minister
while Ismaila Usman, a known anticorruption figure, was appointed finance
minister.
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(:E) (:ELF) (:F.AQU) (:I.AGI) (:I.ENI) (:MOB) (:RD) (:SC) (:U.RSH) (:U.SLR)
08/24 1:45p CDT
oil is even up slightly today. very strange. we bought again at $8. can't figure this one other than overpriced above $40, and way underpriced here. makes more sense at $40 than at $8 |
