OIL & GAS / International Coverage
Iran: Official urges shipment of Caspian oil with "lowest possible investment"
BBC Monitoring Middle East - Economic
Text of report by the Iranian news agency IRNA
Tehran, 8th November: Deputy oil minister in charge of Caspian affairs, Ali Majedi, said the Caspian oil should be transferred with the lowest possible investment, using all potential and actual facilities.
Investment for shipment of Caspian oil should be coincided with gradual increase in oil production if it is going to be cost- effective, he said.
Addressing the second international conference on Caspian oil and gas resources, Majedi added given the fact that Iran has designed a three-phased plan for transfer of the Caspian oil through its oil pipelines and its refinery in Tabriz.
One of the major factor in choosing best route for shipment of Caspian oil is the volume of oil which is to be exported from Caspian Sea littoral countries and its annual growth rate.
Access of the oil consortiums to their needed oil in the future as well as oil prices for the next decade are also important to find out whether it is cost-effective to invest for production of oil, Majedi added.
He said determination of the Caspian Sea legal regime, security and safety and of those countries through which pipelines pass are among other important factors which make it difficult to decide which route is better.
Countries' political goals and objectives are also important as certain countries, in order to resolve their political problems, overlook economic aspects and try to give concession to others by allowing pipeline to go through their territories.
On the other hand, big powers also try to hold foothold in the region and thus cooperate with the said countries.
Therefore, he concluded, economic factor and ecological issues are also important in determination of the best route to carry Caspian oil to the global market.
Amid poverty, Azerbaijanis still hoping for oil wealth
Associated Press
Amid poverty, Azerbaijanis still hoping for oil wealth [ Associated Press ] Writer
BAKU, Azerbaijan (AP) -- Yazgul Khalil looks out on the glistening Caspian Sea and shares her dream of a day when the vast lake of oil lying under the seabed will bring prosperity to Azerbaijan.
"I believe I will see that beautiful time," Ms. Khalil said, her austere face relaxing momentarily in a smile.
The former Soviet republic of Azerbaijan is sitting over an estimated 2 billion tons (14 billion barrels) of oil. But development has been slow, and the absence of a major export pipeline has keep most of the country's 7.5 million people in poverty. Jobs are scarce and monthly salaries rarely exceed 170,000 manat (dlrs 43).
"The oil industry has provided hope for the future, and all the people who come here to work for that industry obviously enjoy a high standard of living," said Thomas Barry, head of the Baku mission of the National Democratic Institute, a private U.S. educational group.
"But it's not like in the last couple of years there has been a huge flow of money from the sale of oil."
Marble and glass office buildings have sprung up along cobblestone streets in the old part of the city. Billboards around town advertise German cars, American cigarettes and Czech beer. But for many Azerbaijanis, an extra loaf of flat bread is a splurge.
Ms. Khalil, a 55-year-old retired engineer who receives a monthly pension of 78,000 manat (dlrs 20), blames President Geidar Aliev's government for the hard times. She says he has failed to produce the oil wealth, restart the idle factories, and end rampant corruption.
"The elite live well. But not us," she says.
Aliev, the former Communist Party leader of Soviet Azerbaijan and KGB general who retook power in a bloodless 1993 coup, has earned many critics abroad for stifling dissent, censoring news media and enforcing a blockade on archrival Armenia. In fact, Azerbaijan is the only former Soviet republic not getting at least some U.S. aid.
Aliev "is an ex-KGB man; he knows how to keep tight controls," unemployed metalworker Nasim Isayev said with bitterness as he watched police lines forming around a small opposition rally in central Baku.
Azerbaijan's state oil company -- headed by Aliev's son Natik -- wants to start pumping crude in April along a pipeline that leads to a Black Sea port in neighboring Georgia. But a major pipeline, which could handle large quantities of oil, is still expected to take years to build.
And with world oil prices sagging, this nation has yet to see the windfall that Aliev has been predicting for years.
Aliev easily won re-election in October, though the ballot was boycotted by the opposition and called undemocratic by foreign observers.
Still, Aliev's carefully cultivated image of a strict grandfather has earned him admirers even among the poor.
"He is a unique person. He can do anything," said Taptyk Kummatov, who was selling sunflower seeds from a cardboard tray in front of a subway entrance.
And despite the holes in his pants, and the fraying edges of his shirt, Kummatov proclaims: "My life is just great now."
Then, he hurried off to continue his rounds under the blazing sun.
Chinese Oilfield Tapping into Offshore Reserves
Xinhua English Newswire
Shengli Oilfield at the mouth of the Yellow River, said it pumped 1.36 million tons of crude oil from the Bohai Sea in the first eight months of the year.
One local observer called this a major breakthrough in using offshore oil reserves to offset a fall in continental production.
Shengli was set up in 1964 and has produced 640 million tons of crude oil since then, or more than a fourth of the country's total since 1949. In recent years however, its annual output has been dropping because of shrinking oil reserves.
The oilfield began offshore operation in the Bohai Sea several years ago and has drilled 140 wells, gaining an annual production capacity of a million tons.
The oilfield is expected to raise annual output of marine crude oil to five million tons by 2000.
Russia: thirty-tonne oil spill in Siberian republic
BBC Monitoring Former Soviet Union - Economic
Text of report by Radio Russia on 9th Nov 98
Thirty tonnes of fuel oil leaked from a pipeline in Ufa {Republic of Bashkortostan} on Monday morning {9th November} after an accident at the pipeline. The Interfax Eurasia agency was told by the republic's Emergencies Ministry that the accident was caused by a burst in the rusty pipeline. The accident happened along the section leading from the Ufa oil refinery to one of the city's heat and power plants. The pipeline was sealed a few minutes after the accident and the power plant put on emergency gas and power provision. Supplies of fuel to homes have not stopped and the scene of the accident is at some distance from residential areas. The fuel is now being collected and sent for refining. The Emergencies Ministry has said there is no threat to the environment.
Nigerians turn to magic in fight against oil firms
The Independent - London
NIGERIA'S OIL industry, one of the biggest in the world, has been crippled by an uprising that has left armed youths in control of installations and forced the evacuation of foreign and local oil workers from the increasingly unstable Niger Delta. It is the result of years of neglect of the people of the area, which is home to the nation's vast natural wealth.
Deep in the channels of the steamy flood plains that make up the delta, the town of Akassa tells the tale. Perched at the point where the mighty Niger spills into the Atlantic, it was once a thriving colonial port. Now, 100 years later, only an old lighthouse serves as a reminder of the town's past pride, and Akassa has become a wasteland. The town of 30,000 has one school but the roof fell in long ago, and grass grows waist-high in the classrooms. There has been no electricity for five years. As for roads, there are none in Akassa, only muddy footpaths.
"We have hospitals and schools but they don't work and we're giving birth to a new breed of illiterates," said Chris Alagoa, of the Akassa Development Project. "This town is moving backwards in time." The irony for residents of Akassa, mostly members of the Ijaw ethnic group, is that on their doorstep millions of dollars are generated every day in oil revenues. "We have nothing here now," said Wisdom Frankolin, 73, an Akassa fishermen and town elder who yearns for the return of colonial days.
To make matters worse, four oil spills have hit Akassa this year already. Mr Frankolin's nets have been ruined by the oil and he says his catches are poor because the fish have suffocated in the polluted water.
His rice field is barren, too, spotted only with a few stumps and scrawny- looking plants that will never be harvested. The oil has seeped into the mud, leaving thick, sodden land that is all but useless. The main oil company operating in the area, Agip, has promised compensation. So far, the villagers say, none has come.
At night, in a room lit only by a flickering kerosene lamp, Mr Frankolin sat in a meeting with the other elders, discussing the town's prospects. It was a scene that could been taking place centuries ago. The discussion was about the secrets of an ancient local cult called Egbesu, which had been dead for generations. The cult traditionally only comes alive in times of the severest crises, and the delta's Ijaw youth are using it now to declare a war on the Nigerian government and the oil companies. Members of Egbesu are supposed to be pacifists who have special powers to protect themselves from attack, but in today's war they are the aggressors.
"The people of the delta don't want trouble, but they are defending themselves against a long-term environmental war which the foreign oil companies have waged on them," said a minority-rights activist, Oronto Douglas.
When dawn broke in Akassa, drumming could be heard rising above the small houses and huts of the town. The Egbesu men emerged, their faces painted with white markings, chanting as they danced threateningly down the footpath.
Children and adults alike fled in fear of the powerful myth that anyone who crosses the path of the Egbesu will be buried up to their necks in mud and abandoned.
Among their many beliefs, a mixture of animism and Christianity, the Egbesumen believe they are invincible warriors who are immune to bullets. "No one can use a gun against me," said 17-year-old Joke Monday, who joined because he was unemployed and bored.
The new-found confidence of youths such as him, and the easy accessibility of automatic weapons in the area have proved enough to crack the backbone of Nigeria's economy.
Thousands of youths have joined the cult across the delta in recent months and have besieged the oil industry. They have taken control of more than 15 oil flow stations, putting a stop to the production of almost 250,000 barrels a day for much of the last month.
Numerous oil workers have been taken hostage and ransomed. Others have been evacuated by their companies with no immediate prospect of return. The companies that have been attacked, particularly [ Shell ] , the largest foreign oil company operating in Nigeria, are holding talks with the locals to try to persuade them to leave the flow stations. But the siege goes on.
The military government has sent soldiers into the delta to try to curb the violence, but some of the soldiers are scared of the Egbesu men's spiritual powers, and find it difficult to counter the guerrilla attacks of the fishermen.
The government, which is promising elections early next year, may be hoping that democracy will reduce tension among the many groups in Nigeria which feel they have been neglected during the past 30 years of military rule. This, others say, is naively optimistic.
"Democracy is not the slogan in the Niger delta; the slogan is self-determination, self-rule and control of our resources," said Mofia Akobo, of the Southern Minorities Group.
The situation in the delta reflects the fragility of the fabric that makes up Nigeria, a country of more than 250 different ethnic groups. Three decades of military rule have left power in the country centralised, and, with or without democracy next year, the wealth will remain concentrated in the pockets of only a few.
The Ijaw uprising in the delta has already had a devastating effect on the economy. But if any of Nigeria's larger ethnic groups were to take matters into their own hands, and insist on getting dividends from the oil wealth through the barrel of a gun, the nation could be plunged into a tragic and bitter civil war.
Seminars address energy strategy
China Daily
A string of international conferences on the energy industry has been held in Beijing recently.
Three international conferences focusing on oil and gas and another international seminar on hydropower have taken place in the capital over the past two weeks.
Two symposia on coalbed methane and the power sector are expected to follow this week.
The proliferation of international energy-related conferences reflects the recognition that it is high time to rethink China's energy development strategy.
China's economic development was shackled by energy shortages for decades. Moreover, decreasing proven oil reserves had become a serious headache for the country's policy makers.
However, not only have colossal stockpiles of coal built up over the past few years, but China's oil producers began to oversupply the domestic market for the first time in the first half of this year. Moreover, the electric power sector has also suffered weak demand.
A recent report from the State Statistics Bureau said China's energy production decreased by 5.1 per cent during the January- September period of 1998 to 835.8 million tons of standard coal equivalent.
Production of rough coal dipped 7.4 per cent to 815.77 million tons, and crude oil output hit 119.64 million tons, down 0.9 per cent.
Ironically, a series of large oil and gas fields newly found in West China, especially in the Tarim and Qaidam basins, have added large amounts of proven reserves this year.
The weak domestic energy demand as well as the slump in international oil prices have not only posed a tough challenge, but also furnished an opportunity to reorient the development of China's energy industry.
The top topic on the energy sector's agenda is how to decrease production costs to survive increasingly heated competition.
The China National Petroleum Corp (CNPC), the China National Offshore Oil Corp (CNOOC), and the China National Star Petroleum Corp (CNSPC) have all planned cuts in crude oil production costs by 10 per cent this year.
Besides adopting advanced technology and strengthening management, it is vital for China's energy industry to trim the workforce to improve efficiency as well as economic benefits.
Another significant requirement is to graft modern foreign technologies onto the industry to rein in increasing environmental pollution caused by domestic energy producers.
China should especially focus on popularizing clean coal technology to decrease sulphur, carbon-dioxide and coal dirt pollution, according to Chen Yuqi, deputy director of the Clean Coal Technology Research Centre under the Coal Science Research Institute.
Moreover, China should begin to seek new energy reserves to support its economic growth in the next century.
Hydropower, natural gas, coalbed methane and heavy oil could become important sources of energy to be exploited on a large scale in the near future.
China's total exploitable hydropower potential is estimated to be 378 million kilowatts, ranking it first in the world. To date, only 14 per cent of its hydropower resources have been exploited, compared with a worldwide average of 22 per cent. The State Power Corp of China plans to build four large hydropower projects with total installed capacity of over 16 million kilowatts by 2010.
China has signed five contracts with foreign companies to exploit its rich coalbed methane resources. By 2010, it is expected to produce 10 billion cubic metres of coalbed methane annually.
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