OIL & GAS PART 1 / International Coverage
US Advisor Sees Compromise On Baku-Ceyhan Oil Line
WASHINGTON, Nov 3 - The Clinton administration's top advisor on Caspian energy policy predicted on Tuesday that a compromise will be reached to secure an oil pipeline route to bring Azerbaijan oil to world markets via Turkey.
The pipeline route, from the Azerbaijan capital Baku through to Turkey's Mediterranean oil port at Ceyhan, is a key U.S. goal in the region, but has appeared to be at risk in recent months because the Turkey line would be too expensive, given the current weak oil market.
Oil company executives doing business in the energy-rich Caspian Sea region have expressed concerns that there won't be enough oil volume in the short term to support the Baku-Ceyhan pipeline, which has a price tag approaching $4 billion.
However, Richard Morningstar, who coordinates Caspian energy policy for the administration, said he expects a consortium of international oil companies will come out in support of the Baku-Ceyhan pipeline when they make their formal recommendation to the Azeri government on or around Nov. 12.
Once the decision is issued, Morningstar said he sees the consortium working out with the countries in the region the detailed financial terms and conditions for building the pipeline in the "weeks and months" to follow.
"What I think we'll see is a statement in support of Baku-Ceyhan sometime around November 12," Morningstar told an audience at the Carnegie Endowment for International Peace, while speaking about U.S. policy in the Caspian region.
Morningstar said that while adequate oil volume is a real issue, the lack of it should not be a "deal breaker" for agreeing on the pipeline route.
"In our view, oil volumes are indeed an important issue, but the lack of volumes should not today...obstruct a credible commitment for Baku-Ceyhan," he said.
He said an agreement could be structured in a way for Caspian countries to offer "specific financing commitments" for building the pipeline as companies achieve certain "target oil volumes."
Morningstar pointed out that there would be an "inverse relationship" between financing incentives from Turkey and the companies' oil volumes.
Morningstar and other top U.S. officials were in the Caspian region last week lobbying for the Baku-Ceyhan pipeline. U.S. Energy Secretary Bill Richardson will travel to the region later this month.
Youth Shun Leaders Plea To End Nigeria Oil Closures
LAGOS, Nov 4 - Militant ethnic Ijaw youths have defied directives by their leaders to quit oil facilities in Nigeria's Delta region which they have held for four weeks, oil industry sources said on Wednesday.
The armed youths demanding access to power and amenities for Nigeria's fourth largest ethnic group are holding oil flowstations of Royal/Dutch Shell <RD.AS> <SHEL.L> and U.S-based Chevron Corp <CHV.N>, cutting Nigeria's output by some 360,000 barrels per day (bpd).
Elders and two youth factions of the Ijaw, who occupy most of Nigeria's main oil-producing Niger Delta, have so far issued statements saying more than 15 facilities still occupied should be vacated.
"Most of the flowstations are still being held despite the directives by known Ijaw leaders," an employee of an oil service company told Reuters in the southern oil town of Warri.
"What I see is that there are several different factions involved in the seizures and often they don't take directives from one another or any single group," he added.
The Federated Niger Delta Ijaw Communities, which claims to represent the groups involved in the closures, said last weekend they had decided to pull out from the facilities and asked for contact with affected oil companies.
Earlier, the Egbesu Boys of Africa, another group operating in the eastern delta, had declared "a ceasefire" on oil firms allowing Italy's Agip to resume operations and Shell to reopen stations in the volatile Nembe district.
But both Shell and Chevron officials say they have neither been allowed access to the remaining swamp locations nor have they seen any signs that the facilities have been vacated.
"The situation remains the same," a Shell official told Reuters in Lagos.
The incidents are part of an upsurge in violence in Nigeria's oil region where locals feel cheated out of the oil wealth pumped from their land. Nigeria currently produces about two million bpd of crude oil.
At least 28 people died in two weeks of fighting between the Ijaw and their Itsekiri neighbours around the oil town of Warri over the relocation of a local council headquarters from an Ijaw to an Itsekiri area. Warri remains tense and under a curfew.
Nigeria's military government so far appears deterred from military action by the maze of intractable creeks in the area.
Oil companies in the region also dread the type of bad publicity that followed the clampdown on the Ogonis, whose leaders, author Ken Saro-Wiwa and eight others, who had campaigned against Shell, were hanged for murder in 1995.
Oil accounts for over 90 percent of the export income of Nigeria, Africa's biggest oil producer and most populous country of over 108 million people
Occidental Petroleum Leaves Russia
MOSCOW, Nov. 3 (UPI) _ Occidental Petroleum Inc. is withdrawing from its Russian oil exploration joint venture in the autonomous republic of Komi (''KOH-mee''), Russian newspapers report.
The U.S.-based company, which received an exploration and drilling license for the Komi site in 1992, will sell its 75 percent stake in the Parmaneft joint venture as part of a restructuring of its European operations.
In 1992, Occidental had paid $10 million for a five-year lease of a plot of land, where it conducted most of the drilling.
Yuri Spiridonov (''YOU-ree spee-ree-DOH-nawf''), the governor of Komi, broke the news to the media after being informed by Paul McInnes, Occidental's senior representative in Russia.
Spiridonov hopes Parmaneft will turn into a fully Russian-owned venture with the local administration taking a significant stake, and that drilling in Komi will continue.
Occidental's departure follows last year's decision by Gulf Oil to pull out of Russia's Arctic north as part of a restructuring.
Amoco has also reportedly scaled back its Russian plans, increasingly turning attention to lucrative oilfields in the Caspian Sea, off the coast of Azerbaijan, which it is developing in partnership with British Petroleum.
11/04 DIARY - Today in the energy markets
WASHINGTON - Energy Information Administration weekly petroleum stocks and output data 1400 GMT.
WASHINGTON - American Gas Association weekly underground storage data 2100 GMT.
BEIJING - Second Chinese Petroleum and Gas Conference organised by China-Petrochemical Consulting Corp, the East-West Centre Energy Program and The Conference Connection Inc. China World Hotel. Opening address by Yan Sanzbong, deputy director state petroleum and chemical bureau at the state Economic and Trade Commission.
BRUGGE, Belgium - 13th Annual European Autumn Gas conference on reshaping the European gas trade to be held at Oud Sin-Jan Congrescentrum in Brugge. Speakers include Jean Vermeire, director general trading and operations at Distrigas, James Ball, managing partner Gas Strategies UK, Pino TerGast, Gas Purchase Director Gasunie, Fabrizio d'Addo, Senior VP International Business Development at ENI, Axel Commichau, President Mobil Europe, James Allcok, Chairman Interconnector (UK) and Clare Spottiswoode, Director General OFGAS UK.
LONDON - Caspian Oil and Gas Summit organised by the Centre for Global Energy Studies and CW Associates with special emphasis on Iran, East-West Pipeline and Russia at Merchant Taylors, 30 Threadneedle St, London EC2R 8AY.
ROME - Italian Industry Minister Pierluigi Bersani presents decree law liberalising the electricity market
to Senate Industry Committee.
BUENOS AIRES - International conference on climate change (Third day).
MIAMI - Fourth Annual Conference Latin Upstream (Final day).
VIENNA - Second Russian Refining Roundtable conference (Final day).
TORONTO - Industrial Gas Users Association conference on natural gas (Final day).
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