Oil Industry Headlines: Week of November 9
Iraq “While big oil companies like Shell and Total are biding their time, cultivating relationships with the Iraqi government and patiently awaiting privatization legislation that may never come, smaller wildcatters are beating them to the punch by signing production and exploration deals in Iraqi Kurdistan.” Is Big Oil Losing The Race For Iraq? — Forbes Magazine In an industry famous for taking risks, it appears that the majors were right to play it safe in Iraq. This week the Iraqi central government warned foreign oil companies that signing illegitimate contracts with the semi-autonomous Kurdish government in Northern Iraq would result in complete exclusion from doing business outside of Iraqi Kurdistan’s territory. Such an exclusion is likely to be extremely painful since only 3% of Iraq’s proven reserves lie within Kurdistan. “Any company that has signed contracts without the approval of the federal authority of Iraq will not have any chance of working with the government of Iraq . . . We warned the companies that there will be consequences,” Oil Minister Hussein al-Shahristani told reporters while attending an OPEC meeting in Saudi Arabia. It is still unclear when� Iraq’s central government will reward the majors for their patience and open its doors to new investment. Legislation that defines the terms for such operations is currently stalled in the Iraqi parliament. Nigeria According to MarketWatch, “Repeated attacks on oil facilities . . . led to the shut down of 28% of Nigeria’s estimated effective production capacity of 2.5 million barrels a day in 2007.” Although Nigerian President Umaru Yar’Adua has repeatedly stated that the government and insurgents are moving toward a peace plan, this week did not indicate progress. On Monday, approximately “60 militants armed with machine guns engaged troops guarding the 400,000 barrel-per-day Qua Iboe terminal in a fierce gunfight for several hours,” reported Reuters. Although operations at the Mobile installation were not affected, one pregnant woman was killed and four others were wounded. In response, ExxonMobil evacuated the families of workers at the Mobil Nigeria Unlimited facility. According to MarketWatch, this week Royal Dutch Shell PLC also confirmed an attack on a major pipeline which supplies crude to the Forcados oil export terminal. Forcados is one of the top two export terminals in Southern Nigeria.Published Thursday, November 15th, 2007 at 5:11 pm and filed under Industry News.