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13 Years Is Too Long for Victims of Shell’s Oil Spills to Wait for Justice

13 Years Is Too Long for Victims of Shell’s Oil Spills to Wait for Justice

This case has beaten a path through the undergrowth for victims of corporate crimes. Now we need strong laws to make this avenue easier to access.

Donald Pols (R), director of Dutch environmental organization Milieudefensie, and Channa Samkalden (L), lawyer for Milieudefensie, react following the court ruling in the case that the organization, along with four Nigerian farmers, filed against Shell over oil leaks that have allegedly polluted their villages, in The Hague, on January 29, 2021. The Nigerian branch of Shell has to pay compensation to some farmers from the African country. The company has been found liable for two oil spills. The amount must

Donald Pols (R), director of Dutch environmental organization Milieudefensie, and Channa Samkalden (L), lawyer for Milieudefensie, react following the court ruling in the case that the organization, along with four Nigerian farmers, filed against Shell over oil leaks that have allegedly polluted their villages, in The Hague, on January 29, 2021. The Nigerian branch of Shell has to pay compensation to some farmers from the African country. The company has been found liable for two oil spills. The amount must be determined later, the court in The Hague ruled. (Photo: Remko de Waal / ANP / AFP via Getty Images)

Justice has finally prevailed for the people of the oil-soaked Niger Delta. On Friday 29th January, after a thirteen year struggle for redress for lives ruined by oil spills, three Nigerian farmers, supported by Milieudefensie/Friends of the Earth Netherlands, beat one of the world’s most powerful transnational corporations, Shell, in court in the Netherlands. Across Nigeria’s southern Delta region, people who have never heard of the Court of Appeal in the Hague celebrated with victory parties. But no victim should have to wait thirteen years for justice. Better laws are needed now to give victims quicker and more effective ways to win remedy.

The discovery of oil in the Niger Delta has brought untold suffering to its people. Shell was there from the start in the 1950s—and with it came oil spills and pollution…

…click on the above link to read the rest of the article…

Petro-States Face Extinction

Petro-States Face Extinction

oil rigs

Petro-states urgently need to begin diversifying their economies, shifting away from oil production, or else they face financial risks in the years ahead.

That conclusion comes from the IEA’s new report, “Outlook for Producer Economies,” which warns that a changing energy system threatens the economies of oil-producing countries. The threat comes in multiple forms, both on the supply side and on the demand side.

Energy efficiency, electric vehicles and other technological changes raise questions about peak demand. Climate regulation also threatens to destroy consumption. On the supply side, U.S. shale could capture a bulk of any demand increase that might have otherwise been met by other oil producers.

These factors pose serious threats to major oil producers, and the IEA focused on six countries: Iraq, Nigeria, Russia, Saudi Arabia, the UAE and Venezuela. All of those countries are significant oil producers and are overwhelmingly dependent on oil revenues to finance their budgets.

That dependence is a risk during normal cycles. The IEA noted that Iraq saw its oil revenues plunge by 40 percent after the 2014 oil price meltdown, while Venezuela saw revenues fall by 70 percent. “Major swings in hydrocarbon revenue can be deeply destabilising if finances and economies are not resilient,” the report said.

However, the problem of petro-dependence is even worse looking forward, because electric vehicles finally offer a competing alternative to crude oil in the transportation sector, while forthcoming carbon restrictions will accelerate the shift off of fossil fuels. This means the threats in the future are structural, not just cyclical.

In the IEA’s central New Policies Scenario, the crisis facing oil producers may not be particularly acute in the 2020s, as U.S. shale is expected to plateau and the potential for medium-term supply tightness could keep revenues aloft.

…click on the above link to read the rest of the article…

Oil’s $133 Billion Black Market

Oil’s $133 Billion Black Market

rig

Oil is still the world’s leading energy source, with growing demand, a fluctuating pricing system, and much of its production in volatile regions. The oil market’s value is larger than the world’s valuable raw metal markets combined, with an annual production valued at US$1.7 trillion. A flourishing black market is no surprise, with about US$133 billion worth of fuels stolen or adulterated every year. These practices fund dangerous non-state actors such as the Islamic State, Mexican drug cartels, Italian Mafia, Eastern European criminal groups, Libyan militias, Nigerian rebels and more – and are a major global security concern.

The top five countries accused of oil trafficking – Nigeria, Mexico, Iraq, Russia, and Indonesia – are also producers. It is estimated that Nigeria alone loses US$1.5 billion a month due to pipeline tapping, illegal production and other sophisticated schemes. In Southeast Asia, about 3 percent of the fuel consumed is sourced from the black market, estimated to be worth up to US$10 billion a year. In Mexico, drug cartels launder drug revenues through the oil trade

Other countries are not immune. Turkey is not an oil producer yet serves as a major transit route for hydrocarbons flowing to Europe from OPEC countries like Iraq and Iran. As an energy hub, Turkey is strategically situated for the illegal trade and lost an estimated US$5 billion in tax revenue in 2017. An uptick in smuggling oil and other refined products began 2014, when ISIS took control of major Syrian and Iraqi oil fields.

As with most commodities, the volume of oil smuggling is primarily linked to fluctuating prices. With climbing oil prices, illicit trade is expected to increase.

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Reuters: OPEC Production Falls To 13-Month Low

Reuters: OPEC Production Falls To 13-Month Low

PDVSA crude refinery

OPEC’s oil production dropped in May by 70,000 bpd to 32.00 million bpd on the back of outages in Nigeria and a continuous decline in Venezuela that dragged the cartel’s total production to the lowest level since April 2017, according to the monthly Reuters survey.

The largest fall in production was registered in Nigeria, according to the survey based on shipping data from external sources, Thomson Reuters flows data, and information provided by sources at OPEC and oil and consulting firms.

Nigeria’s production dropped to 1.85 million bpd in May from 1.94 million bpd in April, the Reuters survey found. Nigeria has been struggling with unplanned shutdowns of pipeline flows this month, and loading of the Forcados grade is being delayed.

The second-largest fall in May came from Venezuela, whose production declined to 1.45 million bpd from 1.50 million bpd, compared to the implied target of 1.972 million bpd, which means that Venezuela’s involuntary “cut” in May was 617,000 bpd—more than the cut pledged and achieved by OPEC’s biggest producer Saudi Arabia.

Saudi Arabia, for its part, as well as the second-largest producer in the cartel, Iraq, slightly raised their production in May over April. Saudi Arabia stayed within its quota and its production inched up to 10.00 million bpd because more crude oil was consumed domestically by power plants, according to sources in the Reuters survey.

Iraq produced more because it increased exports from its southern ports, following a drop last month.

According to the latest available figures by OPEC’s secondary sources—the ones that OPEC uses to measure quotas and compliance with the deal, OPEC’s production in April increased by 12,000 bpd over March, to average 31.93 million bpd, as Saudi Arabia boosted its production by 46,500 bpd.

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Musical Tribute to Bribes in the US, Israel, Nigeria, Everywhere

Israeli PM Netanyahu and Shell executives face bribery charges. US politicians are second to none when selling votes.

Bribes Israeli Style

Israeli police are urging the attorney general to indict Prime Minister Benjamin Netanyahu in two corruption cases involving bribery, fraud and breach of trust.

The recommendation is the result of more than a year of investigations into allegations that Netanyahu improperly accepted expensive gifts including pink champagne and cigars from Israeli Hollywood producer Arnon Milchan and Australian billionaire James Packer in exchange for favors.

Netanyahu appeared on TV denying the charges. It came across as follows: I took bribes and smoked cigars for the good of the nation.

Bribes Nigerian and Italian Style

The Wall Street Journal takes a peek Inside the Bribery Scandal Sweeping Through the Oil Industry.

A top oil executive walked into the marble lobby of an exclusive Milan hotel on a chilly winter night. His dinner date was a former Nigerian oil minister offering to sell one of Africa’s biggest untapped oil discoveries.

Eight years later, the question of whether the $1.3 billion paid for the license to that prized oil field was mostly a bribe is at the heart of one of the biggest bribery scandals the oil industry has ever seen.

Part of a broader crackdown, the case has reached into the highest levels of the executive ranks of Royal Dutch Shell, the second-largest Western oil company—including wiretaps on its chief executive—and into Eni, Italy’s state-backed oil company.

…click on the above link to read the rest of the article…

Oil Market On Edge Following Outages

Oil Market On Edge Following Outages

Oil

Several key outages have left the oil markets anxious despite a promising start to the week. Analysts are keeping a close eye on both Nigeria and Venezuela as political instability threatens to impact supply further.

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– Brazil’s oil production surged this year, jumping to 3.3 million barrels per day (mb/d), up from 3.2 mb/d in 2016 – a figure that includes other liquids production.

– The increase came largely from the pre-salt, which surpassed 1 mb/d in 2017, a sharp 33 percent increase from 2015 levels.

– Brazil is now the 9th largest oil producer in the world.

Market Movers

• Eni (NYSE: E) started production at its Zohr gas field in Egypt. Separately, the Italian oil company said that it restarted production at its Goliat field in Norway’s Arctic after a two-month outage.

• Ecopetrol (NYSE: EC) announced its fourth oil discovery in Colombia this year. “This new discovery shows that we are on the right track to our objective of increasing reserves. We are satisfied with the results of this alliance with Parex, which has underlined the potential of Santander province,” Ecopetrol CEO Felipe Bayon said.

• Total SA (NYSE: TOT) announced a final investment decision for large-scale development of the Libra project in offshore Brazil. The project will consist of a floating production storage and offloading unit with eventual capacity of 150,000 bpd.

Tuesday December 19, 2017

Oil prices initially rose on Monday on news that Nigerian oil workers went on strike, raising fears of a supply outage. The strike was called off, however, leading to a selloff in oil prices. But the lingering outage of the Forties pipeline continues to support Brent prices.

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“Time To Panic”? Nigeria Begs World Bank For Massive Loan As Dollar Reserves Dry Up

“Time To Panic”? Nigeria Begs World Bank For Massive Loan As Dollar Reserves Dry Up

Having urged “don’t panic” just 4 short months ago, it appears Nigeria just did just that as the global dollar short squeeze forces the eight-month-old government of President Muhammadu Buhari to beg The World Bank and African Development Bank for $3.5bn in emergency loans to help fund a $15bn deficit in a budget heavy on public spending amid collapsing oil revenuesJust as we warned in December, the dollar shortage has arrived, perhaps now is time to panic after all.

In September, Nigerian central bank Governor Godwin Emefiele ruled out a naira devaluation on Thursday and told people not to panic about a government order which risks draining billions of dollars from the financial system.

In an interview with Reuters, Emefiele said he was ready to inject liquidity if needed into the interbank market, which dried up this week following the directive to government departments to move their funds from commercial banks into a “Treasury Single Account” (TSA) at the central bank.

The policy is part of new President Muhammadu Buhari’s drive to fight corruption, but analysts say it could suck up as much as 10 percent of banking sector deposits in Africa’s biggest economy – playing havoc with banks’ liquidity ratios.

With global oil prices tumbling, banks and companies are already struggling with the consequences of a dive in Nigeria’s energy revenues that has hit the naira currency and triggered flows of capital out of the country.

Then JP Morgan kicked Nigeria out of its influential Emerging Markets Bond Index last week due to restrictions that the central bank imposed on the currency market to support the naira and preserve its foreign exchange reserves.

Since taking office in May, Buhari has vowed to rein in Nigeria’s dependency on oil exports which account for 90 percent of foreign currency earnings.

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Nigerian Currency Collapses After Central Bank Halts Dollar Sales To Stall “Hyperinflation Monster”

Nigerian Currency Collapses After Central Bank Halts Dollar Sales To Stall “Hyperinflation Monster”

Having told banks and investors “don’t panic” in September, amid spiking interbank lending rates and surging default/devaluation risks, it appears the massive shortage of dollars that we warned about in December has washed tsunami-like ashore in oil-producing Nigeria. Following the Central bank’s decision this week to halt dollar sales to non-bank FX market operators, black market exchange rates spiked to 282/USD (vs 199 official) and CDS spiked to record highs implying drastic devaluations loom.

As Reuters reports, Nigeria’s central bank is halting dollar sales to non-bank foreign exchange operators and letting commercial banks accept dollar deposits with immediate effect, its governor said on Monday, in an effort to shore up dwindling foreign reserves.

Africa’s biggest economy, an OPEC member state that depends on oil sales for about 95 percent of its foreign reserves, has been hammered by a collapse in global oil prices, which has triggered a slide in its naira currency.

Godwin Emefiele said the sale of foreign exchange to bureaux de change would be discontinued because they were using up the country’s foreign reserves for illegal transactions and selling the dollar at 250 naira compared to the official central bank rate of 197 naira.

The currency hit a record low of 282 per dollar on the unofficial market on Monday after the central bank’s announcement.

Emefiele said foreign reserves stood at around $28 billion compared with $37 billion in June 2014, and that the bureaux were depleting them at a rate of $28.4 million per week.

“This is a huge haemorrhage on our scarce foreign exchange reserves, and cannot continue,” Emefiele told a news conference in the capital Abuja.

To avoid devaluing the currency, a stance so far supported by President Muhammadu Buhari, the central bank adopted increasingly stringent foreign exchange rules last year and effectively banned dollar access for the purchase of 41 items, which has also been criticised at the World Trade Organisation by the United States and the European Union.

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Low Oil Prices Could Break The “Fragile Five” Producing Nations

Low Oil Prices Could Break The “Fragile Five” Producing Nations

Persistently low oil prices have already inflicted economic pain on oil-producing countries. But with crude sticking near six-year lows, the risk of political turmoil is starting to rise.

There are several countries in which the risks are the greatest – Algeria, Iraq, Libya, Nigeria, and Venezuela – and RBC Capital Markets has labeled them the “Fragile Five.”

Iraq, facing instability from the ongoing fight with ISIS, has seen its problems compounded by the fall in oil prices, causing its budget to shrink significantly. The government is moving to tap the bond markets for the first time in years, looking to issue $6 billion in new debt.

Revenues have been bolstered somewhat by continued gains in production. Iraq’s oil output hit a record high in July at 4.18 million barrels per day, up sharply from an average of 3.42 million barrels per day in the first quarter of this year. But with Brent crude now dropping well below $50 per barrel, Iraq’s finances are worsening. According to Fitch Ratings, Iraq may post a fiscal deficit in excess of 10 percent this year, and all the savings accrued during the years of high oil prices have been depleted.

Related: EPA Cracking Down On U.S. Methane Waste

Other political problems loom for Iraq. The central government and the semiautonomous region of Kurdistan have been unable to resolve a dispute over oil sales. With revenues running low for the central government, it has failed to transfer adequate funds to the Kurdish Regional Government (KRG). That led to the breakdown of a tenuous deal between the two sides that saw Kurdish oil sold under the purview of the Iraqi government. The KRG is selling oil on its own now in an effort to obtain much needed revenue in order to pay private oil companies operating in its territory.

 

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Oil Price Crash: Top 5 At-Risk Countries

Oil Price Crash: Top 5 At-Risk Countries

Since June 2014, global oil prices have dropped by more than 50%. The drop could strongly affect the economic and political stability of these five oil exporting countries.

Oil prices make winners and losers. In general, oil importers will gain from low prices, while most oil exporters will suffer. Still, there are differences. While the United States, Norway, and the Gulf States can protect themselves with diversified economies and high hard currency reserves, the oil shock could bring some countries to the verge of economic default and political crisis.

Venezuela

Venezuela entered the period of low oil prices with an already frail economy ruined by the more than a decade-long socialist regime of Hugo Chavez and his successor Nicolas Maduro. The oil price slump significantly worsened the country’s already failing economy.

More than 90 percent of Venezuela’s exports and hard currency reserves depend on oil, and with the price of oil 50 percent down, the country is close to a default.

Standard & Poor’s is the last in a line of rating agencies that downgraded Venezuela’s credit rating to junk status and the country’s currency is experiencing a constant devaluation trend. At the same time, inflation is expected to rise to 200 percent this year and the economy to shrink by 7 percent.

 

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BBC News – Boko Haram ‘seizes army base’ in Nigeria town of Baga

BBC News – Boko Haram ‘seizes army base’ in Nigeria town of Baga.

Officials in Nigeria say the Islamist group Boko Haram has seized a town and a military base used by a multinational force set up to fight the insurgents.

The senator for Borno North said troops abandoned the base in the town of Baga after it was attacked on Saturday.

Residents of Baga, who fled by boat to neighbouring Chad, said many people had been killed and the town set ablaze.

Baga, scene of a Nigerian army massacre in 2013, was one of the last towns in the area under government control.

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Nigerians ‘Crying for Money’ as Naira, Boko Haram Hit Trade – Bloomberg

Nigerians ‘Crying for Money’ as Naira, Boko Haram Hit Trade – Bloomberg.

At one of Nigeria’s busiest markets, Ndubuisi Benjamin Nweke complains about the toughest business environmentAfrica’s biggest economy has faced in years.

“Customers are not coming the way they’re supposed to,” said the 46-year-old, whose trade in Chinese-made fabrics at the Idumota market in the commercial capital, Lagos, like many Nigerian importers, is being squeezed by a plunge in the naira. “Everyone is crying for money.”

Nigeria is being hammered on two fronts as it heads toward general elections in February. In the face of plummeting crude prices, the central bank devalued the naira and the government proposed budget cuts. At the same time, Islamist militants of the Boko Haram group have stepped up attacks in their five-year insurgency, and the security forces in Africa’s top crude producer are struggling to stop them.

Northern Nigeria is faring even worse than the south. Cosmetics seller Madu Masa Fantami has witnessed a drop in business after suicide bombers killed dozens at the Monday Market in the northeastern city of Maiduguri last month.

…click on the above link to read the rest of the article…

Nigeria, Belarus Halt All FX Trading As Central Bank Urges “Don’t Panic” | Zero Hedge

Nigeria, Belarus Halt All FX Trading As Central Bank Urges “Don’t Panic” | Zero Hedge.

Just because Russia has managed to stabilize its currency for the time being as crude tries to find a floor, that certainly does not mean the soaring dollar tantrum-cum-crude crash episode is anywhere near over, nor that stability has returned to the rest of the oil-exporting countries. Case in point, crude-exporting powerhouse Nigeria, where things are going from worse to #REF!

As Bloomberg reported yesterday, the temporary Russian FX-trading halt appears to have inspired all other nations with plunging currencies (the Nigeria Naira just hit a new record low against the dollar in recent trade), and as a result Nigerian FX dealers halted trading after a central bank rule change meant to “limit speculation” against the plunging naira confused investors. “This raises concerns about the credibility of the central bank,” Kevin Daly, senior portfolio manager at Aberdeen Asset Management Plc, said by phone from London. “If it was their intention to stabilize or see some appreciation of the naira, it’s backfired.”

Bid and ask prices for the naira were quoted from 162 to 190 per dollar with only 16 trades by 1 p.m. in Lagos [yesterday], compared with more than 170 by the same time yesterday, according to data compiled by Bloomberg. The naira fell 12 percent against the dollar this quarter, the worst among 24 African currencies tracked by Bloomberg after Malawi’s kwacha. Investors dropped Nigerian assets as the outlook for Africa’s biggest oil producer worsened with Brent crude prices almost halving since late June.

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A Pessimist’s Guide To The World In 2015 | Zero Hedge

A Pessimist’s Guide To The World In 2015 | Zero Hedge.

Skirmishes in the South China Sea lead to full-scale naval confrontation. Israel bombs Iran, setting off an escalation of violence across the Middle East. Nigeria crumbles as oil prices fall and radicals gain strength. Bloomberg News asked foreign policy analysts, military experts, economists and investors to identify the possible worst-case scenarios, based on current global conflicts, that concern them most heading into 2015.

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Nigeria Proposes Budget Cuts as Oil Plunge Depletes Revenue – Bloomberg

Nigeria Proposes Budget Cuts as Oil Plunge Depletes Revenue – Bloomberg.

Nigeria proposed cutting next year’s budget by 8 percent and lowered its growth estimate as falling global crude prices erode government revenue ahead of a Feb. 14 presidential election.

Expenditure was trimmed to 4.36 trillion naira ($23.3 billion) in 2015, while the economy will probably expand at a rate of 5.5 percent, about 1 percentage point lower than was originally projected, Finance Minister Ngozi Okonjo-Iweala told reporters today in the capital, Abuja. The plan is based on a benchmark oil price revised down to $65 a barrel from $77.5 in this year’s budget, with the fiscal deficit projected to be 0.79 percent of gross domestic product, from 1 percent projected this year.

Africa’s top oil producer earns about 70 of its income and 95 percent of foreign exchange from crude oil, the price of which has fallen 46 percent this year. The naira has declined 14 percent this year against the dollar, making it the second worst performer in Africa.

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Olduvai IV: Courage
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Olduvai II: Exodus
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