Panama Canal Expansion: the ultimate winner will be ChinaPosted on Feb 10th, 2010 with tags Americas, canal, China, expansion, panama, Project, ultimate, update, Winner.
This week workmen in Panama will start to dig a hole partfunded by Japan, aided by Latin American cash and big enough to hold the world’s biggest Danish-owned, South Koreanbuilt megaships. The ultimate winner, though, will be China.
The work is the latest phase in a US$5.25 billion (NZ$7.6b) project to widen the country’s famous canal – an expansion plan that could comprehensively reshape the flow of world trade and even scupper Warren Buffett’s US$34b all-in bet on United States railways.
Work on deepening the Panama Canal begins amid more evidence of China’s roaring recovery from the global slump. At the weekend, the Centre for Forecasting Science at the Chinese Academy of Sciences predicted that the country would return to doubledigit rates of gross domestic product growth this year. More critically for world trade, imports and exports are expected to grow 19 per cent and 17 per cent, respectively.
These are the sort of figures that have given new momentum to the Panama project, mooted a decade ago when Panama took possession of the canal from the US. The aim is to increase vastly the canal’s capacity. By doing so, shipping industry veterans say, it will re-establish the global importance of the isthmus.
The idea for an expansion began before China’s boom had started. The plans were drawn up in expectation of steady growth in Japanese exports to the US and a rising tide of raw materials heading across the Pacific from Brazil.
The widened canal will become a prime conduit for Chinese-driven global trade. It will make transport costs of finished goods from China to the east coast of the US much cheaper, perhaps by 30 per cent, the canal’s operating firm says. When the work is finished, the canal will be navigable by tankers with capacity of a million barrels of crude oil. That will open new routes for oil and mineral resources from West Africa to be taken directly to China – deepening political bonds that Beijing has carefully fostered. The same dynamic could also bolster China’s influence in the Caribbean, expected to develop as a storage hub for oil before it heads west via the canal and on to China.
Goldman Sachs economists believe the new canal could play a pivotal role in its Bric (Brazil, Russia, India, China) investment story – as a channel more directly linking the Chinese and Brazilian markets.
By the time the expansion work is finished in 2014, the canal will be able to take ships capable of holding 12,600 containers – more than double the capacity of the canal’s present size limit. The new canal will also be large enough for the gas industry’s existing fleet of liquefied natural gas carriers, most of which are too big to make the Panama crossing.
The largest container ships leaving Asia for the US dock in one of the West Coast ports. The containers’ journey continues by freight trains, many run by a rail firm in which Buffett has invested. But with potential cost savings of US$1000 per container, the sea route may prevail as China’s favourite.
Wednesday, February 10, 2010
Nigeria deploys indigenous oil rigs
ABUJA, Nigeria, Feb. 9 (UPI) -- Nigerian drilling contractor SeaWolf Oil Services Ltd. deployed its first indigenous jack-up rigs to offshore fields to explore for oil and gas.
SeaWolf Oil Services said it was moving into Nigerian waters for the first time in its history, Nigeria's Next newspaper reports.
Remi Okunlola, a co-founder of SeaWolf, said he was "pleased" with "the first Nigerian-owned rig to ever operate in Nigeria waters."
Nigeria holds some of the largest natural resource deposits in Africa. Oil reserves are estimated at 36.2 billion barrels of proven oil reserves while gas deposits are estimated at 184 trillion cubic feet.
The energy sector, however, is plagued by underdevelopment and chronic militant activity in the oil-rich Niger Delta region.
The Movement for the Emancipation of the Niger Delta, the main militant group in Nigeria, called off an October cease-fire agreement at the end of January.
Violence and political instability are costing the oil-rich country dearly in terms of production. Production levels dropped nearly 30 percent in recent years, costing the government $1 billion a month in lost oil revenue.
Royal Dutch Shell, meanwhile, announced in January it was offloading three production licenses and related equipment in the Niger Delta to domestic
SeaWolf Oil Services said it was moving into Nigerian waters for the first time in its history, Nigeria's Next newspaper reports.
Remi Okunlola, a co-founder of SeaWolf, said he was "pleased" with "the first Nigerian-owned rig to ever operate in Nigeria waters."
Nigeria holds some of the largest natural resource deposits in Africa. Oil reserves are estimated at 36.2 billion barrels of proven oil reserves while gas deposits are estimated at 184 trillion cubic feet.
The energy sector, however, is plagued by underdevelopment and chronic militant activity in the oil-rich Niger Delta region.
The Movement for the Emancipation of the Niger Delta, the main militant group in Nigeria, called off an October cease-fire agreement at the end of January.
Violence and political instability are costing the oil-rich country dearly in terms of production. Production levels dropped nearly 30 percent in recent years, costing the government $1 billion a month in lost oil revenue.
Royal Dutch Shell, meanwhile, announced in January it was offloading three production licenses and related equipment in the Niger Delta to domestic
Nigeria: Oil field auction may be up to 2B barrels. $12 a barrel to china!
Nigeria will auction off rights to oil fields that may contain up to 2 billion barrels by the end of the year, an effort that could put the West African nation back as the continent's leading oil producer, a presidential adviser said Tuesday.
Emmanuel Egbogah, who serves as President Umaru Yar'Adua's oil adviser, said the auction will include both land and water leases. The Nigerian government has yet to decide what leases will be offered in the auction, but Egbogah said he expected the nation's petroleum minister to make an announcement in the coming months.
The lands include those relinquished by the oil companies already working fields in Nigeria, Egbogah said. He expects China will be among those bidding to enter the nation's oil market. The Chinese have been in negotiations with Nigeria for months and reportedly have offered $50 billion for 6 billion barrels of oil.
Egbogah declined to offer any specifics about the ongoing negotiations.
"I'm sure that if you have a hungry system like China, when the announcement is made, they'll have an interest," he said.
The Financial Times first reported news of the auction Tuesday.
If successfully carried out, the oil auction could propel Nigeria back to Africa's top oil producer. Militant violence and oil thefts have cut Nigeria's oil production by about 1 million barrels a day, allowing Angola to surge ahead. Still, Nigeria's oil remains popular in U.S. as it is easier to refine. It is the third largest oil exporter to the U.S., behind Canada and Mexico.
With Nigeria's position in the U.S. market, attacks, kidnappings and pipeline breaks in the Niger Delta have greatly swayed global oil prices since 2006. Militants there demand that the federal government send more oil-industry funds to Nigeria's southern region, which remains poor despite five decades of oil production.
A presidential amnesty program brought a calm to the Delta. However, the program appears to have stalled as Yar'Adua has been in Saudi Arabia for more than two months to receive medical treatment for what his doctor described a heart condition.
The Movement for the Emancipation of the Niger Delta, the largest militant group in the region, announced Saturday it had abandoned the cease-fire agreement. Meanwhile, a Royal Dutch Shell PLC ruptured after the military says thieves tried to steal crude oil from it.
Egbogah dismissed the idea that the Delta remained a dangerous place for foreign oil workers and their companies.
"Some minor incidents can be used to say that the security situation is as bad as it was in the past," he said. "I think the situation is cooling off."
Oil workers also complain government approvals for their leases have stalled in Yar'Adua's absence. While ExxonMobil Corp. already had its Nigerian oil field licenses renewed, Shell and Chevron Corp. still are in negotiations with the government. Shell also has announced its desire to sell off its rights to three oil fields.
It remains unclear what effect Yar'Adua's absence may have on the proposed auction.
Emmanuel Egbogah, who serves as President Umaru Yar'Adua's oil adviser, said the auction will include both land and water leases. The Nigerian government has yet to decide what leases will be offered in the auction, but Egbogah said he expected the nation's petroleum minister to make an announcement in the coming months.
The lands include those relinquished by the oil companies already working fields in Nigeria, Egbogah said. He expects China will be among those bidding to enter the nation's oil market. The Chinese have been in negotiations with Nigeria for months and reportedly have offered $50 billion for 6 billion barrels of oil.
Egbogah declined to offer any specifics about the ongoing negotiations.
"I'm sure that if you have a hungry system like China, when the announcement is made, they'll have an interest," he said.
The Financial Times first reported news of the auction Tuesday.
If successfully carried out, the oil auction could propel Nigeria back to Africa's top oil producer. Militant violence and oil thefts have cut Nigeria's oil production by about 1 million barrels a day, allowing Angola to surge ahead. Still, Nigeria's oil remains popular in U.S. as it is easier to refine. It is the third largest oil exporter to the U.S., behind Canada and Mexico.
With Nigeria's position in the U.S. market, attacks, kidnappings and pipeline breaks in the Niger Delta have greatly swayed global oil prices since 2006. Militants there demand that the federal government send more oil-industry funds to Nigeria's southern region, which remains poor despite five decades of oil production.
A presidential amnesty program brought a calm to the Delta. However, the program appears to have stalled as Yar'Adua has been in Saudi Arabia for more than two months to receive medical treatment for what his doctor described a heart condition.
The Movement for the Emancipation of the Niger Delta, the largest militant group in the region, announced Saturday it had abandoned the cease-fire agreement. Meanwhile, a Royal Dutch Shell PLC ruptured after the military says thieves tried to steal crude oil from it.
Egbogah dismissed the idea that the Delta remained a dangerous place for foreign oil workers and their companies.
"Some minor incidents can be used to say that the security situation is as bad as it was in the past," he said. "I think the situation is cooling off."
Oil workers also complain government approvals for their leases have stalled in Yar'Adua's absence. While ExxonMobil Corp. already had its Nigerian oil field licenses renewed, Shell and Chevron Corp. still are in negotiations with the government. Shell also has announced its desire to sell off its rights to three oil fields.
It remains unclear what effect Yar'Adua's absence may have on the proposed auction.
OPEC Worries U.S. Economic Uncertainty Will Hurt Oil Demand
LONDON—Uncertainty about the pace of the U.S. recovery is putting oil-demand growth at risk for the world's largest crude consumer and is weighing on global consumption, the Organization of Petroleum Exporting Countries said Wednesday in its monthly report.
The warning, adding to OPEC's concerns about European countries such as Greece, suggests the group is likely to stick to its existing production quotas when it meets March 17 in Vienna.
"The 1% forecast growth in U.S. oil demand this year is facing a set of obstacles that could prevent it from materializing," the report said. "If this happens, then the U.S. oil demand might come flat if not negative for the total year," OPEC added. The U.S., which uses close to a quarter of the crude oil consumed worldwide each day, "is a key country to world oil-demand changes," the report said.
The organization also warned of "heightened fiscal uncertainties in the euro zone," with "the mounting public debt of some of its member countries, particularly Greece." Greece's budget deficit and debt load have put its sovereign bonds at risk of default, triggering credit-market jitters world-wide.
Fellow European Union partners are now considering a bailout. In the major industrialized countries, "the recovery is far from self-sustaining and remains largely dependent on continued government support," OPEC said. The organization, which has come under pressure in the past to increase production, may have a vested interest to paint a bleaker picture than consumer nations.
But its concerns follow last week's data from the U.S. Department of Energy that unexpectedly showed a weekly buildup in crude inventories as refineries continue to struggle with not enough demand. Despite its concerns, OPEC said Wednesday it was keeping its world oil-demand forecast unchanged for 2010, hoping that rising Chinese consumption will make up for any weakness in Western economies.
Global demand is still expected to average 85.1 million barrels a day this year, growing by 0.81 million barrels a day from last year. That would suggest a downgrade in demand growth of 10,000 barrels a day. In its previous report, OPEC estimated demand growth at 0.82 million barrels a day. But the expected rise in global consumption comes as OPEC members may already be outpacing demand growth.
While OPEC sees demand for its own oil at 28.8 million barrels a day on average this year, the group's production rose to 29.2 million barrels a day in January, up 63,200 barrels a day. The statistics, based on secondary sources, show compliance with production cuts agreed in 2008 has now fallen to 53.5% from 80% in March last year.
Higher production in Angola and Venezuela more than offset a drop in Nigeria's output, which fell by 124,000 barrels a day in January. There, militants in the Niger Delta restarted attacks on oil installations last month, shutting down some production for Royal Dutch Shell PLC and Chevron Corp.
The warning, adding to OPEC's concerns about European countries such as Greece, suggests the group is likely to stick to its existing production quotas when it meets March 17 in Vienna.
"The 1% forecast growth in U.S. oil demand this year is facing a set of obstacles that could prevent it from materializing," the report said. "If this happens, then the U.S. oil demand might come flat if not negative for the total year," OPEC added. The U.S., which uses close to a quarter of the crude oil consumed worldwide each day, "is a key country to world oil-demand changes," the report said.
The organization also warned of "heightened fiscal uncertainties in the euro zone," with "the mounting public debt of some of its member countries, particularly Greece." Greece's budget deficit and debt load have put its sovereign bonds at risk of default, triggering credit-market jitters world-wide.
Fellow European Union partners are now considering a bailout. In the major industrialized countries, "the recovery is far from self-sustaining and remains largely dependent on continued government support," OPEC said. The organization, which has come under pressure in the past to increase production, may have a vested interest to paint a bleaker picture than consumer nations.
But its concerns follow last week's data from the U.S. Department of Energy that unexpectedly showed a weekly buildup in crude inventories as refineries continue to struggle with not enough demand. Despite its concerns, OPEC said Wednesday it was keeping its world oil-demand forecast unchanged for 2010, hoping that rising Chinese consumption will make up for any weakness in Western economies.
Global demand is still expected to average 85.1 million barrels a day this year, growing by 0.81 million barrels a day from last year. That would suggest a downgrade in demand growth of 10,000 barrels a day. In its previous report, OPEC estimated demand growth at 0.82 million barrels a day. But the expected rise in global consumption comes as OPEC members may already be outpacing demand growth.
While OPEC sees demand for its own oil at 28.8 million barrels a day on average this year, the group's production rose to 29.2 million barrels a day in January, up 63,200 barrels a day. The statistics, based on secondary sources, show compliance with production cuts agreed in 2008 has now fallen to 53.5% from 80% in March last year.
Higher production in Angola and Venezuela more than offset a drop in Nigeria's output, which fell by 124,000 barrels a day in January. There, militants in the Niger Delta restarted attacks on oil installations last month, shutting down some production for Royal Dutch Shell PLC and Chevron Corp.
Nigerian Militant Group Says It ‘Disabled’ a Shell Pipeline
Feb. 7 (Bloomberg) -- A militant group in Nigeria’s southern oil region said it “disabled” a trunk oil pipeline operated by Royal Dutch Shell Plc, renewing attacks to win local control of oil revenue.
The overnight attack at Obunoma south of the oil industry hub of Port Harcourt cut supplies from oil fields Nembe Creek, Belema, Soku and Ekulama, the Joint Revolutionary Council said in an e-mailed statement today.
Precious Okolobo, Shell spokesman in Nigeria, said the company hasn’t received any report of an attack on its installations as claimed by the group.
Attacks by armed groups in the Niger River delta, which is home to Nigeria’s oil and gas industry, cut more than 25 percent of the country’s oil production between 2006 and 2009. Nigeria, which vies with Angola for Africa’s top oil producer, is the fifth-biggest supplier of U.S. oil imports.
Shell, Exxon Mobil Corp., Chevron Corp., Total SA and Eni SpA operate joint ventures for the state-owned Nigerian National Petroleum Corp. in the region.
The Movement for the Emancipation of the Niger Delta, the main armed group in the region, said on Jan. 30 it called off a three-month “indefinite cease-fire” and would resume attacks on the country’s oil industry. MEND, as the group is known, said the government’s refusal to consider the region’s demand for “the control of its resources and land” dashed hopes the cease-fire will lead to genuine peace.
Attacks Rise
Attacks on the oil industry, including sabotage of pipelines and abduction of oil workers, is on the rise again in the region after a lull which followed President Umaru Yar’Adua’s amnesty program that saw thousands of fighters disarm last year.
Yar’Adua hasn’t appeared in public since Nov. 23, when his personal physician said that he had been flown to Saudi Arabia for treatment of a heart ailment. Vice President Goodluck Jonathan has been unable to exercise full presidential powers because Yar’Adua hasn’t formally handed over authority to him.
In Yar’Adua’s absence, militant leaders say, government pledges to rehabilitate fighters and address their demands for more local control of the region’s oil wealth haven’t been met.
The overnight attack at Obunoma south of the oil industry hub of Port Harcourt cut supplies from oil fields Nembe Creek, Belema, Soku and Ekulama, the Joint Revolutionary Council said in an e-mailed statement today.
Precious Okolobo, Shell spokesman in Nigeria, said the company hasn’t received any report of an attack on its installations as claimed by the group.
Attacks by armed groups in the Niger River delta, which is home to Nigeria’s oil and gas industry, cut more than 25 percent of the country’s oil production between 2006 and 2009. Nigeria, which vies with Angola for Africa’s top oil producer, is the fifth-biggest supplier of U.S. oil imports.
Shell, Exxon Mobil Corp., Chevron Corp., Total SA and Eni SpA operate joint ventures for the state-owned Nigerian National Petroleum Corp. in the region.
The Movement for the Emancipation of the Niger Delta, the main armed group in the region, said on Jan. 30 it called off a three-month “indefinite cease-fire” and would resume attacks on the country’s oil industry. MEND, as the group is known, said the government’s refusal to consider the region’s demand for “the control of its resources and land” dashed hopes the cease-fire will lead to genuine peace.
Attacks Rise
Attacks on the oil industry, including sabotage of pipelines and abduction of oil workers, is on the rise again in the region after a lull which followed President Umaru Yar’Adua’s amnesty program that saw thousands of fighters disarm last year.
Yar’Adua hasn’t appeared in public since Nov. 23, when his personal physician said that he had been flown to Saudi Arabia for treatment of a heart ailment. Vice President Goodluck Jonathan has been unable to exercise full presidential powers because Yar’Adua hasn’t formally handed over authority to him.
In Yar’Adua’s absence, militant leaders say, government pledges to rehabilitate fighters and address their demands for more local control of the region’s oil wealth haven’t been met.
Q+A-What will shift in power mean for Nigeria?
Nigerian Vice President Goodluck Jonathan's takeover as acting head of state eases immediate concerns over who is in charge after President Umaru Yar'Adua's absence of more than two months for medical treatment.
Below are answers to questions on what it could mean for key sectors and initiatives:
OIL INDUSTRY
The fate of a ceasefire and amnesty programme for militants in the Niger Delta is crucial for the oil and gas production on which Nigeria depends for some 90 percent of foreign earnings.
The ceasefire had been put in doubt by Yar'Adua's absence and above all on delivering benefits to militants who had threatened to resume violence which at its height shut in as much as a quarter of Nigeria's oil output and helped push up world crude prices by a few cents on the barrel.
Main militant group MEND said it was still weighing options.
But Jonathan's arrival could get things back on track, at least in the short term, by ensuring that funding is pushed through and discussions continue.
The fact that he is from the delta should on the surface give him greater leverage with militants from his Ijaw tribe who for the first time see one of their own at the helm in Nigeria.
But politics in the delta is complicated by local rivalries and some resistance to making Jonathan acting president actually came from others in his home region.
That means it will be essential for him to be able to bring on board all the potentially troublesome local political strongmen, who could easily stir up trouble, as well as to satisfy the militant gangs.
The other key front is a bill to reform the oil industry which is currently up for discussion and parts of which are seen as unfavourable by multinationals such as Royal Dutch Shell, ExxonMobil and Chevron.
Having Jonathan in place means this could be passed more easily, however the constitutional doubts over the way that Jonathan came to power mean any legislation is in danger of being challenged in the courts.
THE ECONOMY
Jonathan's more formal role as acting president should now allow him to sign the 2010 budget, taking a brake off government departments -- as long as that does not lead to a legal challenge to his constitutional authority.
In his first speech as acting president, Jonathan clearly set out priority areas -- power, infrastructure, creating jobs and boosting business -- all of which could require significant spending increases.
Past Nigerian governments that know their lifespan is limited have been among the most free spending of all. With elections scheduled before May 2011 as well, there is every likelihood of a repeat this time.
The risk is not only in terms of potential inflationary pressures -- which stood at 12 percent in December -- but that increased spending could be wasted on ill-judged projects or lost to corruption in a country ranked 130 of 180 on Transparency International's most recent corruption index.
Local markets have largely shrugged off the political bluster. The naira NGN= is barely changed versus the dollar at 150.8 since Yar'Adua left the country. The All-Share Index is up nearly 8 percent since then.
BANKING REFORM
Yar'Adua won plaudits locally and internationally for appointing a central bank governor who took rapid measures to stabilise the financial system, bail out undercapitalised banks and clean up a sector riddled with mismanagement.
In so doing, however, Central Bank Governor Lamido Sanusi trod on many powerful toes -- sacking the heads of nine banks that benefited from a $4 billion bailout and putting in others to run them.
Yar'Adua's absence had raised questions over whether Sanusi would still be able to push through the next steps in the face of opposition from powerful vested interests.
Sanusi's reputation at home and abroad means it would be hard for anyone to openly challenge the reforms and knock them completely off track without badly damaging perceptions of Nigeria.
But there is a much greater chance that reforms could be delayed and of quiet resistance to Sanusi's measures.
This could stir Nigeria's ethnic hornet's nest too. Some opponents of Sanusi's tough measures accused him and Yar'Adua of being Muslim northerners out to take over the largely southern based banking system.
The shift in power to Jonathan could certainly help embolden Sanusi's foes.
POLITICS
Behind the scenes electioneering is already underway for the ballot due before mid-2011 and calculations over how that would play out were undoubtedly a factor in the weeks of tense wrangling before Jonathan formally assumed executive powers.
Yar'Adua is highly unlikely to run because of his illness and Jonathan may not contest because of an unwritten agreement within the ruling party that power rotates between north and south after every two presidential terms.
That leaves the field open for other northerners who would want to contest for the leadership of the ruling People's Democratic Party, who will be a shoo-in for the presidency.
If Yar'Adua were to resign or die before the election, it would then make Jonathan president instead of acting president and would leave the vice-presidency open for any northerner seeking a springboard for the presidency.
A political reform bill which is in the pipeline could also mean elections are held as early as late 2010.
Despite the uncertainty in recent weeks, Nigeria's military made clear that it is standing on the sidelines and did not plan to seize power as it did frequently before 1999 elections ended army rule.
The army cannot be excluded as a political force however. Uncertainties of the constitutionality of a government, chaotic political environments and unchecked corruption have all provided excuses for ambitious soldiers in the past.
Below are answers to questions on what it could mean for key sectors and initiatives:
OIL INDUSTRY
The fate of a ceasefire and amnesty programme for militants in the Niger Delta is crucial for the oil and gas production on which Nigeria depends for some 90 percent of foreign earnings.
The ceasefire had been put in doubt by Yar'Adua's absence and above all on delivering benefits to militants who had threatened to resume violence which at its height shut in as much as a quarter of Nigeria's oil output and helped push up world crude prices by a few cents on the barrel.
Main militant group MEND said it was still weighing options.
But Jonathan's arrival could get things back on track, at least in the short term, by ensuring that funding is pushed through and discussions continue.
The fact that he is from the delta should on the surface give him greater leverage with militants from his Ijaw tribe who for the first time see one of their own at the helm in Nigeria.
But politics in the delta is complicated by local rivalries and some resistance to making Jonathan acting president actually came from others in his home region.
That means it will be essential for him to be able to bring on board all the potentially troublesome local political strongmen, who could easily stir up trouble, as well as to satisfy the militant gangs.
The other key front is a bill to reform the oil industry which is currently up for discussion and parts of which are seen as unfavourable by multinationals such as Royal Dutch Shell, ExxonMobil and Chevron.
Having Jonathan in place means this could be passed more easily, however the constitutional doubts over the way that Jonathan came to power mean any legislation is in danger of being challenged in the courts.
THE ECONOMY
Jonathan's more formal role as acting president should now allow him to sign the 2010 budget, taking a brake off government departments -- as long as that does not lead to a legal challenge to his constitutional authority.
In his first speech as acting president, Jonathan clearly set out priority areas -- power, infrastructure, creating jobs and boosting business -- all of which could require significant spending increases.
Past Nigerian governments that know their lifespan is limited have been among the most free spending of all. With elections scheduled before May 2011 as well, there is every likelihood of a repeat this time.
The risk is not only in terms of potential inflationary pressures -- which stood at 12 percent in December -- but that increased spending could be wasted on ill-judged projects or lost to corruption in a country ranked 130 of 180 on Transparency International's most recent corruption index.
Local markets have largely shrugged off the political bluster. The naira NGN= is barely changed versus the dollar at 150.8 since Yar'Adua left the country. The All-Share Index is up nearly 8 percent since then.
BANKING REFORM
Yar'Adua won plaudits locally and internationally for appointing a central bank governor who took rapid measures to stabilise the financial system, bail out undercapitalised banks and clean up a sector riddled with mismanagement.
In so doing, however, Central Bank Governor Lamido Sanusi trod on many powerful toes -- sacking the heads of nine banks that benefited from a $4 billion bailout and putting in others to run them.
Yar'Adua's absence had raised questions over whether Sanusi would still be able to push through the next steps in the face of opposition from powerful vested interests.
Sanusi's reputation at home and abroad means it would be hard for anyone to openly challenge the reforms and knock them completely off track without badly damaging perceptions of Nigeria.
But there is a much greater chance that reforms could be delayed and of quiet resistance to Sanusi's measures.
This could stir Nigeria's ethnic hornet's nest too. Some opponents of Sanusi's tough measures accused him and Yar'Adua of being Muslim northerners out to take over the largely southern based banking system.
The shift in power to Jonathan could certainly help embolden Sanusi's foes.
POLITICS
Behind the scenes electioneering is already underway for the ballot due before mid-2011 and calculations over how that would play out were undoubtedly a factor in the weeks of tense wrangling before Jonathan formally assumed executive powers.
Yar'Adua is highly unlikely to run because of his illness and Jonathan may not contest because of an unwritten agreement within the ruling party that power rotates between north and south after every two presidential terms.
That leaves the field open for other northerners who would want to contest for the leadership of the ruling People's Democratic Party, who will be a shoo-in for the presidency.
If Yar'Adua were to resign or die before the election, it would then make Jonathan president instead of acting president and would leave the vice-presidency open for any northerner seeking a springboard for the presidency.
A political reform bill which is in the pipeline could also mean elections are held as early as late 2010.
Despite the uncertainty in recent weeks, Nigeria's military made clear that it is standing on the sidelines and did not plan to seize power as it did frequently before 1999 elections ended army rule.
The army cannot be excluded as a political force however. Uncertainties of the constitutionality of a government, chaotic political environments and unchecked corruption have all provided excuses for ambitious soldiers in the past.
Nigeria oil rebels say watching political developments
LAGOS, Feb 10 (Reuters) - The main militant group in Nigeria's oil-producing Niger Delta said on Wednesday it was monitoring developments after Vice President Goodluck Jonathan assumed presidential powers, but declined to comment further.
"We are monitoring the unfolding drama and will react at the appropriate time," the Movement for the Emancipation of the Niger Delta (MEND) said in an email to Reuters.
The group last month said it was ending a unilateral ceasefire and threatened renewed attacks on Africa's biggest oil and gas industry amid delays to an amnesty programme caused partly by the absence of President Umaru Yar'Adua. (For more Reuters Africa coverage and to have your say on the top issues, visit: af.reuters.com/ ) (Reporting by Nick Tattersall; Editing by Matthew Tostevin)
"We are monitoring the unfolding drama and will react at the appropriate time," the Movement for the Emancipation of the Niger Delta (MEND) said in an email to Reuters.
The group last month said it was ending a unilateral ceasefire and threatened renewed attacks on Africa's biggest oil and gas industry amid delays to an amnesty programme caused partly by the absence of President Umaru Yar'Adua. (For more Reuters Africa coverage and to have your say on the top issues, visit: af.reuters.com/ ) (Reporting by Nick Tattersall; Editing by Matthew Tostevin)
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