Nigeria's Petro Bill (PIB) Goes to Parliament

http://www.petroleumafrica.com/en/newsarticle.php?NewsID=13917

Goodluck Jonathan, Nigeria’s president, has sent the much delayed Petroleum Industry Bill (PIB) to parliament for debate

"I am happy to announce to you that this morning Mr President forwarded the Petroleum Industry Bill to the national assembly," Diezani Alison-Madueke, the West African country’s oil minister told reporters.

Nigeriahas seen various drafts of the PIB drawn up in recent years but they have been scrapped or re-written because government, lawmakers, and foreign oil companies couldn't agree on details.

UAE opens export terminal outside Hormuz

http://www.tankeroperator.com/news/todisplaynews.asp?NewsID=3659

As Iranian threats to close the Strait of Hormuz grew last weekend, the United Arab Emirates loaded its first cargo on Sunday from its new oil export terminal at Fujairah.

UAE oil officials and executives from oil majors, including ExxonMobil, Shell and Total, witnessed the opening of an alternative route for up to 75% of UAE’s oil exports, reported Reuters.

A European Union ban on Iranian crude imports came into effect on 1st July and Iran has been intensifying its threats to disrupt oil shipments from the Gulf. Two Iranian military officials warned over the weekend that Iran could stop oil from sailing through the Strait.

Alarmed by the Iranian threats, the UAE has completed its long-delayed project to pump up to 1.8 mill barrels per day to an export terminal at Fujairah.

Over the next few months, the Gulf OPEC member hopes to increase exports from the new facility to around 1.5 mill barrels per day, nearly two-thirds of the 2.4 mill it typically exports each day and the new pipeline could carry three-quarters of the UAE’s oil exports if needed, Reuters reported.

“This is a very strategic project, it gives the options to our clients to transport larger quantities (of oil),”UAE’s oil minister Mohammed bin Dhaen al-Hamli said. “I consider this project to be complementary, so we have an alternative…to give us choice to have more than one trade route.”

The 370-km Abu Dhabi Crude Oil Pipeline carries oil from fields in the UAE’s western desert to Fujairah. As well as the export terminal, the facility also has eight crude oil storage tanks each with a capacity of one million barrels.

The first cargo was loaded last Sunday with oil pumped from western fields in Abu Dhabi across to be shipped from Fujairah to Pakistan. The bulk of UAE’s oil is exported to Asia.

“It will make other projects viable in this area, and will also avoid more insurance and also will give access to the open sea,” Abdulla Nasser Al Suwaidi, the head of state-run Abu Dhabi National Oil Co (ADNOC) said after the opening ceremony.

In addition, Saudi Arabia has opened a bypass in the last few months, giving Riyadh scope to export more of its crude from Red Sea terminals should Iran try to block the Strait of Hormuz, but other Gulf oil exporters remain dependent on it, Reuters said.

Tanker transits through the Strait last year accounted for about 35% of all sea-borne traded oil, or almost 20% of oil traded worldwide.

Almost 17 mill barrels of oil were shipped between the northern tip of Oman and the southern coast of Iran in 2011, according to the US Energy Information Administration.

Abu Dhabi government-owned International Petroleum Investment Company (IPIC) undertook the pipeline project and ADNOC’s onshore unit ADCO is the operator.

IPIC is also planning to build a $3 bill refinery at Fujairah with a capacity of 200,000 barrels per day, due to be completed in mid-2016, Reuters said.

Checkbook diplomacy? China pledges $20 billion in credit to Africa

China's President Hu Jintao (right) shakes hands with South Africa's President Jacob Zuma during the opening ceremony of the Fifth Ministerial Conference of the Forum on China-Africa Cooperation in Beijing on Thursday.

http://worldnews.msnbc.msn.com/_news/2012/07/19/12828957-checkbook-diplomacy-china-pledges-20-billion-in-credit-to-africa?fb_ref=.UAgMHDM9xlw.like&fb_source=profile_multiline

By NBC News wire services

BEIJING -- Chinese President Hu Jintao on Thursday pledged African governments $20 billion in credit over the next three years and called for more China-Africa coordination international affairs to defend against the "bullying" of richer powers.

Hu made the lending pledge during the opening ceremony of the Forum on China-Africa Cooperation in Beijing. The credit line is double the amount offered in 2009 at the last forum held in Egypt.

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Hu promised more Chinese help for African countries in building agricultural technology centers, training medical and other personnel, and digging wells to expand access to clean water. China will encourage investment and assistance in infrastructure that facilitates trade within Africa, he said.

China has emerged as Africa's main trading partner and a major source of investment for infrastructure, pouring billions of dollars into roads and developing the energy sector across the continent.

But the loans could add to discomfort in the West, which criticizes China for overlooking human rights abuses in its business dealings with Africa, especially in Beijing's desire to feed its booming resource-hungry economy.
PhotoBlog - Africa rising? China building on Zambian frontier

Hu brushed off such concerns in his speech at the Great Hall of the People, attended by leaders including South African President Jacob Zuma and Equatorial Guinea's Teodoro Obiang Nguema, a man widely condemned by rights groups as one of the world's most corrupt leaders.

"China wholeheartedly and sincerely supports African countries to choose their own development path, and will wholeheartedly and sincerely support them to raise their development ability," Hu said.

China will "continue to steadfastly stand together with the African people, and will forever be a good friend, a good partner and a good brother", he added at the summit held every three years since 2000.

Sudan's president, who is accused by an international court of war crimes, is visiting China, one of the biggest investors in his country. The visit comes just days before the oil-rich south of Sudan declares its independence. NBC's Adrienne Mong reports.
  

Hu also pledged to "continue to expand aid to Africa, so that the benefits of development can be realized by the African people." He did not provide an amount.

Hu said the new loans would support infrastructure, agriculture, manufacturing and development of small and medium-sized businesses in Africa.

'Checkbook' approach

Critics say China supports African governments with dubious human rights records as a means to get access to resources.
The EU has rejected what they call China's "checkbook" approach to doing business with Africa, saying it would continue to demand good governance and the transparent use of funds from its trading partners.

Such criticism draws rebukes from China that the West still views Africa as though it were a colony. Many African countries say they appreciate China's no-strings approach to aid.

"Africa's past economic experience with Europe dictates a need to be cautious when entering into partnerships with other countries," Zuma told the forum.

"We are particularly pleased that in our relationship with China we are equals and that agreements entered into are for mutual gain," Zuma added.

Oil-hungry China welcomes alleged war criminal al-Bashir

"We certainly are convinced that China's intention is different to that of Europe, which to date continues to intend to influence African countries for their sole benefit."

China's friendship with Africa dates back to the 1950s, when Beijing backed liberation movements in the continent fighting to throw off Western colonial rule.

Growing trade links

Chinese state-owned firms in Africa also face criticism for using imported labor to build government-financed projects like roads and hospitals, while pumping out raw resources and processing them in China, leaving little for local economies.

"Certainly quite a number of us are thinking we need to move into more value addition," South African's Trade and Industry Minister Rob Davies told Reuters.

"We need to export mineral products in a more processed form ... We need to bite this bullet very seriously."
Trade has jumped in the past decade, driven by Chinese hunger for resources to power its economic boom and African demand for cheap Chinese products.

China's trade with Africa reached $166.3 billion in 2011, according to Chinese statistics. In the past decade, African exports to China rose to $93.2 billion from $5.6 billion.

Industrial and Commercial Bank of China 601398.SS, for example, the world's most valuable lender, has invested more than $7 billion in various projects across the continent.

Reuters and The Associated Press contributed to this report.

Supertanker sea storage looms as oil prices fall

http://in.reuters.com/article/2012/06/25/oil-storage-idINL6E8HP7V320120625

* Floating oil storage may become profitable as prices fall
* Contango oil price structure brings funds roll losses

* Pressure to sell prompt, buy forward helps build stocks

By Christopher Johnson and Jonathan Saul

LONDON, (Reuters) - Speculators could soon be hoarding crude oil in supertankers off the coast of Britain and other European countries if prompt oil prices keep falling, shipping and oil industry executives say.

A glut of crude oil in western spot markets is forcing the price of oil for immediate delivery below forward futures costs, and it could soon be profitable to buy oil, store it and sell it later in the year at higher prices.

Three years ago - the last time oil prices fell sharply on world spot markets - dozens of supertankers were moored along the English south coast and off Scotland as floating storage.

Nearby spot oil prices have almost fallen enough to make that happen again and the trend is likely to continue, opening up a trading window shortly, analysts and shipping firms say.

"We could soon see a return of floating storage," said Olivier Jakob, analyst at consultancy Petromatrix in Zug, Switzerland. "For floating storage to be workable, the spreads need to widen a little bit, but not much. We aren't far away."

Oil prices have fallen 30 percent from this year's peak over $128 per barrel, with nearby North Sea Brent crude oil futures on the InterContinental Exchange now about $90.

The resumption of Libyan crude oil production after almost a year of civil war, a big rise in Middle East oil output, global economic slowdown and the closure of several oil refineries have left the prompt oil market heavily over-supplied.

Brent for immediate use is trading at a discount of around $1 to August futures and oil for delivery in a year's time is around $2 dearer, in a price structure known as 'contango'.

The contango is not yet quite deep enough to pay for oil storage and other costs such as financing, but it has been widening steadily this month and storing oil at sea could soon be a viable option for oil companies and trading houses.

ROLL LOSSES

This week money managers controlling billions of dollars of pension funds and other investors will decide where to allocate their portfolios in the third quarter and they are likely to move out of prompt Brent if the contango looks set to persist.

A contango brings 'roll losses' for investors if they have to sell out of a weak front futures contract and buy more expensive later months as prompt months expire.

This would help depress prompt oil, deepening the contango.

"A contango feeds itself," said a senior trader with a large U.S.-owned oil company. "No one wants roll losses every month."

Average daily earnings for supertankers known as very large crude carriers, or VLCCs, on the benchmark Middle East Gulf to Japan route - the major market barometer - reached $11,159 on Friday, down slightly from Thursday, Baltic Exchange data show.

These are poor returns for ships that can carry up to 2 million barrels of crude oil, and they make long-term chartering of VLCCs an attractive alternative for some tanker owners.

The current cost of a one-year time charter for a VLCC runs from around $23,000 per day, and shorter charters, for three to six months, would start from around $25,000 per day - or about 37 cents per barrel of crude oil per month.

The August-September ICE Brent futures spread traded on Monday at up to 34 cents - just 3 cents lower.

Frode Morkedal, analyst with ship brokerage and investment bank RS Platou Markets in Oslo, said onshore stocks of crude oil were rising fast and offshore storage options could soon open.

"A supply overhang is building as the short term Brent curve has moved into a small contango," Morkedal said. "On-land inventories are not full, but should the overproduction of oil continue ... floating storage may again become a hot topic."

Oil traders say that for floating storage trading plays to be a serious option for most speculative traders, the spread between Brent futures months would have to exceed 40 cents per barrel and a margin of 50 cents would be better.

"Even if spreads are not wide enough yet to bring floating storage, they will encourage traders to hold cargoes longer," Jakob said. "That will put extra pressure on prompt prices."

Shell: Disagrees with $5 Billion Fine for Nigeria Oil Spill

http://online.wsj.com/article/BT-CO-20120717-704875.html

By Sarah Kent

LONDON--Royal Dutch Shell PLC (RDSA) confirmed Tuesday it faces a $5 billion fine for its Bonga oil spill offshore Nigeria late last year, but added that it doesn't "believe there is any basis in law" for such a punishment.

The company's Nigerian subsidiary "responded to this incident with professionalism and acted with the consent of the necessary authorities at all times to prevent environmental impact as a result of the incident," Shell said in a statement.

The leak at the 200,000 barrel-a-day Bonga field in December was Nigeria's worst offshore spill in more than a decade and resulted in at least 40,000 barrels-a-day of oil spilling into the ocean.

Write to Sarah Kent at sarah.kent@dowjones.com

PetroSA Negotiating for Jubilee Stake

http://www.petroleumafrica.com/en/newsarticle.php?NewsID=13884

PetroSA is looking to pick up a stake in Ghana’s Jubilee oilfield and is in talks with Sabre Oil & Gas. Nosizwe Nocawe Nokwe, the head of South Africa’s state-run company, said the company hoped to conclude the deal soon.

"We hope to conclude (the Sabre deal) in the near-term future," Nokwe told Reuters, but declined to disclose the potential value of the deal.

There is also a possibility that PetroSA will pick up a stake in Mozambique’s recently discovered offshore natural gas bounty. Nokwe said the company was in talks with ENI regarding a potential partnership in the neighboring country.

PetroSA may also participate in the next bidding round for blocks expected in Mozambique towards the end of the year.
"In our upstream strategy we are looking at access to near-producing blocks. We are constantly looking at opportunities ... either by acquisitions or bidding for acreage," she said.

US tightens Iranian sanctions’ noose

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The US has ramped up pressure on Iran's ability to export oil this week, identifying Tehran's main tanker concern and exposing dozens of its vessels as government-controlled entities.

In the latest set of measures designed to stop Iran from acquiring nuclear weapons, the US Treasury identified 58 NITC vessels and 27 of its affiliates as extensions of the state, which would undermine Iran's attempts to use renamed, disguised vessels to evade sanctions, the department said, reported Reuters.

The exposures, which also included naming what Washington said were four front companies for Iran's state oil enterprise, would help countries and foreign companies comply with Western penalties against Iran, it was claimed.

A US Government official said the measures would have some impact on Iran's ability to sell oil. "It will make it that much more difficult for Iran to deceive potential purchasers about the origin of the oil," the official told reporters, including Reuters.

US companies and Americans are already prohibited from doing business with entities controlled by Iran's government.

NITC changed the names and flags of many of its tankers ahead of a European Union ban on Iranian oil imports. It was thought that some tankers were moved from the Maltese and Cypriot registries to Tuvalu and Tanzanian flags.

NITC’s fleet has become in the spotlight this month, as new European Union sanctions have cut off access to the London-based ship insurance market, putting Iran off-limits to almost every major tanker operator.

"We will continue to ratchet up the pressure so long as Iran refuses to address the international community's well-founded concerns about its nuclear program," Treasury Undersecretary David Cohen said in a statement.

The US sanctions have limited Iran's major trading partners from buying Iranian crude. The EU banned Iranian oil imports, as well as providing insurance for vessels carrying Iranian oil from 1st July.

Malaysian-based Noor Energy, Petro Suisse, Dubai-based Petro Energy and Hong Kong Intertrade were identified by the US as being controlled, or acting on behalf of the Iranian government. The Treasury said they were acting as front companies for the National Iranian Oil Company (NIOC) and other blacklisted Iranian entities, Reuters said.

US lawmakers said that the US Treasury's action was a move in the right direction but said much more had to be done. "We must continue to increase pressure on the Iranian regime until it verifiably abandons its nuclear weapons programme," said Howard Berman, the top Democrat on the House Foreign Affairs Committee, who has asked Tuvalu and Tanzania to stop accepting Iranian oil tankers in to their registries.

A senior Senate Republican aide said the administration was finally playing the game correctly by exposing Iranian fronts for sanctions evasion and laying the groundwork for new sanctions legislation that will make any business dealing with such entities illegal.

Four individuals, including an Austrian, who allegedly provided support to Iran's missile programme and an Islamic Revolutionary Guard Corps official were also blacklisted.

Meanwhile, the Iranian Central Insurance Company has announced that it will offer cover to foreign tankers, which are destined for Iranian ports.

The company's managing director Mohammad Karimi told the IRNA News Agency, the decision has been made to deal with international sanctions against Iran’s oil sector, reported the Baku-based Trend News.

Due to the EU sanctions, Iran will see its oil exports fall by more than 50% this month compared with June, before the sanctions came into force.

European insurers who dominate the maritime sector are also banned from offering cover on Iranian crude.