INTERNATIONAL BITS AND PIECES - WEDNESDAY A.M. 10/21/98
Shell says end to Nigeria oil closures in sight
LAGOS, Oct 20 - Royal/Dutch Shell's Nigerian oil producing unit <RD.AS> <SHEL.L> said on Tuesday it had made progress in talks with protesting youths to end the blockage of 378,000 barrels per day (bpd) of its output.
"Broad-based talks have been going on with the communities involved and the overall trends are encouraging. I expect the problems to end in the next day or two," a company spokesman told Reuters in Lagos.
But he said he could not confirm if an agreement had been sealed with communities in the volatile Nembe district where a faction of the protesting ethnic Ijaw youths declared a "cease-fire" on oil firms last week.
The Ijaw youths demanding access to amenities and greater say in government for the fourth largest ethnic group in the country, have cut Nigeria's oil exports of some two million bpd by a third in the past two weeks.
Apart from Shell the operations of U.S-based Chevron Corp <CHV.N> and Italy's Agip [AGIS.CN] have also been affected.
But Agip said on Monday it had resumed exports from its 130,000 bpd Brass River terminal and called off a force majeure on loadings after the protesters lifted the siege on its facilities.
The protests were part of an upsurge of violence in the key oil producing Niger Delta where impoverished villagers have grown restive over alleged neglect by government and oil firms amid the huge wealth pumped from their land.
Colombia defense chiefs slam ELN oil blast denial
BOGOTA, Oct 20 - Defense chiefs on Tuesday condemned the "vile cynicism" of leftist rebels who admitted bombing Colombia's largest oil pipeline, but denied setting the spilled oil on fire, which killed 48 people, half of them children.
National Liberation Army (ELN) guerrillas, who last week held cordial peace talks with government officials and civic leaders, have blamed the army for setting alight spilled crude oil several hours after the pipeline was blown up on Sunday.
But experts from the British, French and Canadian consortium that operates the 500-mile (800 km) Ocensa pipeline said on Tuesday the high-quality crude went up in flames "10 to 20 seconds maximum" after the initial explosion. "This is a vile claim and the ELN is trying to elude its responsibility ... this group doesn't even have the courage to recognize its own mistakes," Defense Minister Rodrigo Lloreda said.
"I'm aghast at the cynicism of this group," he added, in the most direct government criticism of the ELN since the blast.
Fighters from the Cuban-inspired ELN, Colombia's second-largest rebel force, dynamited the Ocensa pipeline before dawn on Sunday and a sea of blazing crude engulfed the nearby gold-mining villages of Machuca and Fraguas, in northwest Antioquia province.
Most of the victims were burned as they slept. At least 80 others were badly injured in the disaster.
Last week the ELN launched preliminary talks with the government aimed at ending Colombia's long-running civil conflict, which has claimed 35,000 lives in the last decade alone.
But it has said it will continue bombing the country's energy infrastructure to protest what it sees as excessive foreign involvement in Colombia's oil industry until the government changes its policies.
In a communique issued late on Monday, the ELN said it was "deeply sorrowed" by Sunday's tragedy.
But it added, "In previous pipeline attacks ... we have confirmed the army was the one that set fire to the spilled fuel oil ... We are saying clearly that the criminal hand that caused the fire in Fraguas did not belong to the ELN."
Armed forces chief Gen. Fernando Tapias angrily rejected the ELN statement as a "huge slander and show of cynicism." He said troops had only reached the zone about seven hours after the blast and subsequent fire.
The attack threatened to derail the fledgling peace process. Independent civic leaders, who paved the way for talks, were now questioning the rebel group's will to call a halt to its three-decade-old uprising.
"At moments like these I understand those who portray me as a modern Chamberlain," wrote Francisco Santos, editor of the leading El Tiempo newspaper, who met with ELN chieftains at a secret camp last week.
"I'm not calling for peace at any price but I firmly believe that a negotiated solution to the armed conflict is the best deal for all of us."
The Ocensa pipeline, which pumps 400,000 barrels of crude a day from the Cusiana-Cupiagua oil field operated by British Petroleum Co Plc <BP.L> in eastern Colombia to the Caribbean coast port of Covenas, was due to be repaired by late on Tuesday.
Sunday's attack was the second time the pipeline was blown up since it came into operation midway through 1997.
The ELN has dynamited the Cano Limon-Covenas pipeline, the second-largest in the country, more than 60 times this year.
Saudi heir skirts Japan oil drilling rights issue
TOKYO, Oct 21 - Saudi Arabia's Crown Prince Abdullah steered clear on Wednesday of assuring Japanese Prime Minister Keizo Obuchi that Japan's key drilling rights in the Neutral Zone would be renewed, the Foreign Ministry said. Japan's leading oil producer Arabian Oil Co Ltd (AOC) <1603.T> holds a concession in the oil-rich Neutral Zone shared by Saudi Arabia and Kuwait.
The Saudi portion of Japan's drilling rights are due to expire in 2000.
"For more than 40 years, Arabian Oil has been playing a vital role as a symbol of friendship between the two nations," Prime Minister Keizo Obuchi was quoted by a foreign ministry offical as saying to Abdullah in an official meeting in Tokyo on Wednesday.
Crown Prince Abdullah, the appointed heir to Saudi Arabia's King Fahd, arrived in Japan on Wednesday afternoon with the Saudi delegation for a three-day visit.
"I hope negotiations between Saudi Arabia and the Japanese company will be concluded soon," Obuchi said.
In reply, the crown prince said that oil is playing an important role in the bilateral relations, but fell short of giving Obuchi his endorsement to the Neutral Zone rights renewal.
The Kuwaiti portion of AOC's rights expire in 2003.
The offshore concession in the Neutral Zone represents Japan's most significant upstream oil interest, with daily crude output of around 300,000 barrels per day.
Japan relies almost entirely on imports for its crude oil requirements.
The foreign ministry official said there were no new requests by Abdullah at the meeting for Japan to step up its oil imports from Saudi Arabia.
Abdullah asked former Prime Minister Ryutaro Hashimoto, when he visited Riyadh last November, to buy more of Saudi Arabia's crude oil, a move seen by some analysts as implicitly linked to the Neutral Zone negotiations.
Japan's crude imports from Saudi Arabia averaged one million barrels per day in 1997, making the kingdom the second largest crude oil supplier to Japan after the United Arab Emirates.
As for investment and other areas of cooperation, Japan agreed with Saudi Arabia to extend technological expertise in the fields of power and petrochemical industries, and to invite 300 engineers from Saudi Arabia for a three year period of technical training beginning in 1998.
More specific bilateral issues could be discussed at ministerial-level meetings scheduled for Thursday, the Foreign Ministry official said. Travelling with the Saudi delegation are Oil Minister Ali al-Naimi and Planning Minister Abdul-Wahab bin Abdul-Salam Attar.
Elf<ELFP.PA>, ENI to sign Iran deal "very soon"
PARIS, Oct 21 - French oil group Elf Aquitaine SA and Italy's ENI <ENI.MI> will sign an exploration contract "very soon" with Iran for the Doroud offshore oil field which was offered to foreign investors in 1995.
"We hope to be in a position to sign a contract very soon," an Elf spokesman said on Wednesday.
Asked to comment on a Wall Street Journal report that the signing could take place this weekend, he said Elf hoped to sign "within the next two weeks" while there were still some "details to be settled".
Elf has long been in talks on Doroud and has been saying since the start of the year that it was close to signing.
Doroud is a field which has been operating since 1964. Under the deal to be signed, seen worth some $600 million, its output will be boosted with Elf and Agip making the necessary investments and getting oil in return.
Industry sources expect Elf to be the operator with a 55 percent stake and ENI to have the remaining 45 percent.
France's Total <TOTF.PA> last year signed a landmark $2 billion deal for the Sirri fields with Iran, causing a storm of indignation from the U.S. administration which finally decided not to impose trade sanctions on Total.
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