Tuesday, September 25, 2012

Somali Pirate Attacks On Decline

http://www.huffingtonpost.com/2012/09/25/somali-pirate-attacks_n_1913509.html

HOBYO, Somalia — The empty whiskey bottles and overturned, sand-filled skiffs littering this once-bustling shoreline are signs the heyday of Somali piracy may be over. Most of the prostitutes are gone and the luxury cars repossessed. Pirates while away their hours playing cards or catching lobsters.

"There's nothing to do here these days," said Hassan Abdi, a high school graduate who taught English in a private school before turning to piracy in 2009. "The hopes for a revitalized market are not high."
Armed guards aboard cargo ships and an international naval armada that carries out onshore raids have put a huge dent in piracy and might even be ending the scourge.

While experts say it's too early to declare victory, the numbers are startling: In 2010, pirates seized 47 vessels. This year they've taken five.

For a look at the reality behind those numbers, an Associated Press team from the capital, Mogadishu, traveled to the pirate havens of Galkayo and Hobyo, a coastal town considered too dangerous for Western reporters since the kidnappers have turned to land-based abductions over the last year.

There they found pirates who once owned vast villas living in darkened, unfurnished rooms, hiding from their creditors.

Prostitute Faduma Ali longs for the days when her pirate customers had money. As she smoked a hookah in a hot, airless room in Galkayo last week, she sneered as she answered a phone call from a former customer seeking some action on credit.

"Those days are over. Can you pay me $1,000?" she asked. That's what she once got for a night's work. "If not, goodbye and leave me alone."

"Money," she groaned as she hung up.

The caller, Abdirizaq Saleh, once had bodyguards and maids and the attention of beautiful women. When ransoms came in, a party was thrown, with blaring music, bottles of wine, the stimulant khat and a woman for every man.
 
Now Saleh is hiding from creditors in a dirty room filled with dust-covered TVs and high-end clothes he acquired when flush.

"Ships are being held longer, ransoms are getting smaller and attacks are less likely to succeed," said Saleh, sitting on a threadbare mattress covered by a mosquito net. A plastic rain jacket he used at sea dangled from the door.

Somali pirates hijacked 46 ships in 2009 and 47 in 2010, the European Union Naval Force says. In 2011, pirates launched a record number of attacks – 176 – but commandeered only 25 ships, an indication that new on-board defenses were working.

The last of the five hijacked this year was the Liberian-flagged MV Smyrni, taken with its crew of 26 on May 10. They are still being held.

"We have witnessed a significant drop in attacks in recent months. The stats speak for themselves," said Lt. Cmdr. Jacqueline Sherriff, a spokeswoman for the European Union Naval Force.

Sherriff attributes the plunge in hijackings mostly to international military efforts – European, American, Chinese, Indian, Russian – that have improved over time. In May, after receiving an expanded mandate, the EU Naval Force destroyed pirate weapons, equipment and fuel on land. Japanese aircraft fly over the shoreline to relay pirate activity to nearby warships.

Merchant ships have also increased their communications with patrolling military forces after pirate sightings, Sherriff said. Ships have bolstered their own defenses with armed guards, barbed wire, water cannons and safe rooms.

No vessel with armed guards has ever been hijacked, noted Cyrus Moody of the International Maritime Bureau. A June report from the U.N. Monitoring Group on Somalia and Eritrea said armed guards have forced pirates to "abort attacks earlier and at greater ranges from targeted vessels."

Some of those who live around Hobyo along central Somalia's Indian Ocean coastline say they never wanted the region to become a pirate den. Fishermen say piracy began around 2005 as a way to keep international vessels from plundering fish stocks off Somalia.

But in the absence of law and order in a country that has not had an effective central government for two decades, ransoms grew and criminal networks planned more sophisticated operations, launching attacks on freighters and yachts from mother ships hundreds of miles offshore.

Now things seem to be changing.

Once lively Hobyo was quiet last weekend, except for the sight of legitimate fishermen taking their boats out to sea. The price of a cup of tea – which cost 50 cents during the piracy boom – has fallen back to 5 cents. The lobster haul has replaced international freighters as the topic of conversation.
"The decline of piracy is a much-needed boon for our region," said Hobyo Mayor Ali Duale Kahiye. "They were the machines causing inflation, indecency and insecurity in the town. Life and culture is good without them."

Two pirates with AK-47 assault rifles slung over their shoulders wandered along the beach near a Taiwanese fishing vessel that washed up on shore after the brigands who seized it were paid a ransom and released the crew.

During the piracy boom, pirates could count on creditors to front the money to buy skiffs, weapons, fuel and food for their operations. Now financiers are more reluctant.

Walking along a street in Galkayo, Saleh pointed to a villa with a garden of pink flowers he once owned. Short on cash, he was forced to hand it over to a creditor.

Another pirate, Mohamed Jama, relinquished his car to a financier. European naval forces disrupted five of his hijacking attempts, he said, and destroyed skiffs and fuel he owned.

"He could not pay my $2,000, so I had to take his $7,000 car," said the creditor, Fardowsa Mohamed Ali. "I am no longer in contact with pirates now because they are bankrupt and live like refugees."
While many former pirates are unemployed, Mohamed Abdalla Aden has returned to his old job as a soccer coach for village boys. Aden said it now takes him a month to earn as much as he used to spend in a single day as a pirate.

"The coasts became too dangerous," he said, holding an old, beat-up mobile phone. "Dozens of my friends are unaccounted for and some ended up in jail."

An untold number of pirates have died at sea in violent confrontations, bad weather or ocean accidents. The U.N. says 1,045 suspected or convicted pirates are being held in 21 countries, including the U.S., Italy, France, the Netherlands, Yemen, India, Kenya, Seychelles and Somalia.
"The risks involved in the hijacking attempts were very high. EU navies were our main enemy," Saleh said.

Several pirate attacks made worldwide headlines, including a rescue in 2009 of an American hostage by Navy SEALs. Pirates still hold seven ships and 177 crew members, according to the EU Naval Force. At the height of Somali piracy, pirates held more than 30 ships and 600 hostages at a time.
The overwhelming majority of hostages have been sailors on merchant ships, though European families have also been seized while traveling in the dangerous coastal waters. Four Americans were killed in February 2011 when the pirates who boarded their ship apparently became trigger-happy because of nearby U.S. warships.

For the pirates, the risks of being arrested, killed or lost at sea are overshadowed by the potential for huge payouts. Ransoms for large ships in recent years have averaged close to $5 million. The largest reported ransom was $11 million for the Greek oil tanker MV Irene SL last year.

When the monsoons that have roiled the Indian Ocean the past two months subside in about two weeks, the number of successful hijackings – or lack thereof – will go a long way toward telling if the heyday of Somali piracy is truly over.

Still Somalia's widespread poverty and the lure of potential riches make it too soon to say whether the scourge has been squelched.

"We hope so. But at the same time we are definitely advising all vessels not to become complacent just because the numbers are down," said Moody of the International Maritime Bureau. "The reward for the Somali pirate once they get a vessel is enormous, so just giving that up is probably not going to be easy."

Abdi Farah, an elder in Galkayo, said he believes the end of piracy is near.

"Pirates brought vices like drugs and AIDS, nothing else," he said. "There were no benefits."

Traders turn doomed refineries into cash machines

 
http://in.reuters.com/article/2012/09/25/refinery-traders-idINL5E8KAJPG20120925

* Traders seen close to recouping money spent on purchases
* Gunvor CEO calls refining margins "extremely good"

* Profitability of refining set to decline next year

By Emma Farge and Simon Falush

GENEVA/LONDON, Sept 25 (Reuters) - Trading houses Vitol and Gunvor are earning millions of dollars a week from their newly acquired European oil refineries, only months after the sector was described as doomed and the previous owner of the plants went bankrupt.

The traders are profiting from a surprise reversal of the fortunes of Europe's refining sector, which for years had struggled with poor refining margins - the value of oil products over the cost of the crude from which they are extracted.

Refining margins, which were languishing next to zero, jumped higher thanks to a contraction in capacity because of a refinery closure, stoppages due to accidents and seasonal maintenance.

While the debate is still on as to whether traders are enjoying fat margins, for now at least, due to pure luck or their talent for anticipation, one thing is sure - they are close to recouping money they spent on buying the refineries from the insolvent Petroplus.

"Those refineries are now printing more money in a month than during several previous years all together," said a former Petroplus employee familiar with the new owners.

One of the new owners confirms that things look rosy, at least for now, though this may not last as some of the reasons for the sudden improvement in the business are only temporary and the market outlook is challenging.

"Last year, we saw significant amount of (refinery) closures because refining margins were very bad," said Gunvor's Chief Executive and co-owner, Torbjorn Tornqvist. "Now they are good, actually they are extremely good."

Vitol and Gunvor, the world's No.1 and No.4 energy trading houses which between them control the majority of trades in Geneva and London, bought three of Petroplus' five plants in Belgium, Germany and Switzerland after the independent refiner collapsed under a pile of debt in January.

ASSET HUNGER

Secretive traders have for decades focused their businesses on niche deals, often employing only a few dozen of people, whose main role is to connect buyers and sellers.

Hunger for physical assets was seen as a key reason for the push into refining. Refineries represented an ideal home for their large cash piles and would enable the trading houses to extend control over supply lines as they already own stockpiles of crude and oil products.

A few months after the purchases, the traders are thriving where others have failed - in the refining business itself.

Facts Global Energy consultancy estimates that margins have shot up to a four-year high of $8 a barrel in early September from around $2 at the start of the year, when Petroplus went into administration.

So the ageing plants, which just a few months ago looked ready for the scrap heap, are profitable again, says Gunvor. Vitol, which bought Cressier with AtlasInvest in May, declined to comment on the profitability of operations.

Traders and analysts give several reasons why refining margins have recovered so steeply, with production of gasoline in Europe generating the best returns in the past four years.

The prices reflect limited supply as other Europe's refiners undergo seasonal maintenances. Unplanned outages in the United States and a fire at a large Venezuelan refinery also cut deliveries to consumers.

KEY ROLE

Traders could hardly anticipate those development, but they certainly played a key role in the closure of Petroplus' most modern refinery, Coryton, in Britain.

To the surprise of the industry, Coryton failed to attract a buyer, despite being seen as one of the company's prize assets, helping to tighten the markets and boost margins.

The fact that the industry was on its knees also meant that competition for the Petroplus assets, especially the smaller units like Belgium's 110,000 barrel per day Antwerp plant and Switzerland's 70,000 bpd Cressier, was scarce.

A source familiar with Vitol's deal to buy Cressier -- a plant that was Petroplus' least profitable -- said it was bought for "substantially less than $50 million".

Based on the average European refinery run rates of 86-87 percent, as assessed by JBC Energy, and FACTS Global Energy's variable cost margin of $7 a barrel for northwest Europe, the traders are close to paying back what they spent on the plants.

Reuters calculations based on those figures suggest that Cressier would be generating around $412,000 per day or $25 million over the past two months. The same formula shows that Gunvor could be making a nominal profit of around $670,000 a day on its Antwerp plant.

" The new owners will have paid a huge chunk of their investments back already just this quarter," said a bank analyst specialising in European refining.

The payback calculations do not however take into account considerable liabilities that the trading houses have shouldered with the purchases, such as high labour costs or turnarounds.

So in the longer term these liabilities may make the plants less profitable, and should their new owners decide to close them, they could face high redundancy costs.

Analysts said that oil traders can probably extract more profits from the plants than Petroplus because they have better access to credit.

"Petroplus was hampered by credit limits and inventory management was very important for them. A company like Vitol will have much more working capital so they can be more flexible," said Gemma Gouldby, analyst at FACTS Global Energy.

Most industry experts, including the traders themselves, realise the boom time will not last forever given chronic challenges in the sector.

Europe's refiners have been struggling with shrinking oil demand and tough environmental rules for years as new modern rival refineries come onstream in Asia and the Middle East.

"I do believe that over a period of time we will see further consolidation in the European refining industry, meaning fewer refineries," said Gunvor's Tornqvist. "I expect a weakening of refining margins during the course of next year." (Reporting by Emma Farge and Simon Falush; Additional reporting by Dmitry Zhdannikov and Vladimir Soldatkin in Moscow; Editing by Giles Elgood)

Thursday, September 20, 2012

First Bank Funds Nigerian Local Content

 
http://www.petroleumafrica.com/en/newsarticle.php?NewsID=14262

First Bank of Nigeria Plc has provided an asset finance facility of $29.03 million to Nigerian indigenous engineering firm Broron Oil & Gas Ltd. The asset facility is for the funding of a multifunctional field support vessel and other equipment for an ongoing contract with Mobil Producing Unlimited.

Speaking recently during the christening of the vessel DSV AVIANNA, special adviser to Nigeria’s president Goodluck Jonathan, Sullivan Akachukwu Nwakpo, urged other indigenous companies to take advantage of the Nigerian Content Act.

“I am sure that there are so many Nigerians, who have sufficient funds to do better than what we are seeing today but they appear not to have picked the courage to believe that there is a law signed by the president that actually works,” he said.

First Bank has committed well over N500billion to financing oil and gas projects in Nigeria as part of efforts to enhance local capacity and competitiveness, according to statistics released by the bank.

ENI HIts Oil/Gas in Ghana's OCTP Block


http://www.petroleumafrica.com/en/newsarticle.php?NewsID=14274

Ghana has a new discovery off its coast with Italian firm ENI making its first discovery on the Offshore Cape Three Points (OCTP) block with the drilling of the Sankofa East-1X well. The company said that the discovery is relevant as it may have the potential for commercial development and confirms the importance of the block also in terms of the presence of oil, as well as natural gas and condensates.

ENI plans for the immediate drilling of other wells to delineate the size of the discovery and confirm the feasibility of commercial development.

The Sankofa East-1X well, which reached a total depth of 3,650 meters, in 825 meters of water, encountered 28 meters with gas and condensate with 76 meters of gross oil pay in Cretaceous sandstones. During the production test, carried out in the oil level, the well produced about 5,000 high quality bpd of oil. The flow rates during the production testing were constrained by surface infrastructures.

In addition, there are ongoing engineering studies for the development and commercialization of gas reserves of the block in accordance with the principles sanctioned in the MoU recently signed by ENI, Vitol, and GNPC with the Minister of Energy of Ghana. The MoU focuses particularly on the domestic gas market, in which ENI and its JV partners wish to play a prominent role.

ENI, through its subsidiary ENI Ghana Exploration and Production Ltd., is the operator of the OCTP block with a 47.222% share. Other partners are Vitol Upstream Ghana Ltd., with a 37.778% share, and state company GNPC with a 15% share. GNPC has an option for an additional 5% share

Wednesday, September 19, 2012

Mexico Pipeline Fire: 26 Workers Killed In Big Blaze Near U.S. Border

 
Mexico Pipeline Fire
A firefighter climbs a ladder in an effort to control a fire after an explosion at a gas pipeline distribution center in Reynosa, Mexico on Tuesday Sept. 18, 2012. (AP Photo/El Manana de Reynosa)
 
http://www.huffingtonpost.com/2012/09/19/mexico-pipeline-fire_n_1895670.html

CIUDAD VICTORIA, Mexico -- A big fire erupted at a natural gas pipeline distribution center near Mexico's border with the United States on Tuesday, killing 26 maintenance workers and forcing evacuations of people in nearby ranches and homes.

Mexico's state-owned oil company, Petroleos Mexicanos, initially reported 10 deaths at the facility near the city of Reynosa, across from McAllen, Texas. Later, the death toll was raised to 26, including a man who was run over when he rushed onto a highway running away from the facility.

Pemex said at a news conference Tuesday night that the fire was extinguished in 90 minutes and the pipeline was shut off. The pipeline carries natural gas from wells in the Burgos basin.

The company's director-general, Juan Jose Suarez, said four of those killed were Pemex employees and the rest were employed by contractors. He told reporters in Reynosa that 46 other workers were injured, including two hospitalized in serious condition. Suarez said they haven't found any evidence showing it was an attack.

Company executives said there was a gas leak, followed by an explosion, but the precise cause had not been determined.

"Why there was such leak is something that must be investigated," said Carlos Morales Gil, Pemex's director of exploration and production.

Civil protection officials evacuated ranches and homes within three miles (five kilometers) of the gas facility, which is about 12 miles (19 kilometers) southwest of Reynosa.

Authorities didn't say how many people were evacuated, but the area is sparsely populated, Tamaulipas state's civil protection director Pedro Benavides told a Televisa station.

The highway that connects Reynosa to the industrial city of Monterrey was closed to traffic, authorities said.
Egidio Torre Cantu, governor of the state of Tamaulipas, sent condolences to the victims' relatives and vowed to make sure those injured receive help for their recovery.

Pipelines carrying gasoline and diesel in Mexico are frequently tapped by thieves looking to steal fuel.

Several oil spills and explosions have been blamed on illegal taps. But thieves seldom target gas pipelines.

In December 2010, authorities blamed oil thieves for an oil pipeline explosion in a central Mexico city near the capital that killed 28 people, including 13 children. The blast burned people and scorched homes, affecting 5,000 residents in an area six miles (10 kilometers) wide in San Martin Texmelucan.

Tuesday, September 18, 2012

Alaskans to get $878 in yearly oil wealth payout

 
 
 
ANCHORAGE, Alaska (AP) — It's not much — $878 — but Sina Takafua (SEE'nah TAWK'-ah-fwah) isn't balking at the free money she'll get in her first annual payout from Alaska's oil savings account.
 
She's happy with the amount she'll receive just for living in the state, in her case the northernmost town of Barrow.

State officials on Tuesday announced the amount of dividends to be distributed to all men, women and children who have lived in Alaska for at least one calendar year.

This year's amount is significantly less than last year's dividend of $1,174, and it's the lowest since 2005. The payout will be distributed Oct. 4.

Alaska has no state income tax, but residents must pay federal taxes on the bounty. What they do with the rest is up to them.