Nigeria, once again in chaos in its oil industry. Blame the Avengers..

Once again, Nigeria, which was from a long time ago Africa's top oil producer and exporter, is descending into chaos, but this time add to the already problematic scene of religious extremist violence of BOKO HARAM, the coming back of the once called MEND now turbocharged and more arrogant and intransigent than ever "The Avengers" (sounds more like a movie, unfortunately it is not), and has brought a renewed wave of violence and repeated attacks against the most important oil and gas facilities targeting this time especially the ones operated by EXXON and also ENI has been victim of these recent attacks, which has caused a tremendous plunge in nigerian overall oil production, which according to recent data from the Nigerian National Petroleum Corporation, in march descended in less than 2 MMBD, to 1.8 MMBD, which could be found in this report: Nigeria oil production plunged to 1.8 MMBD in March 2016. This definitely shows how impacted the nigerian oil industry has been because of these recent surge in attacks from the Avengers. 

These renewed attacks come presumably as a direct consequence of diverse and consecutive measures taken by President of Nigeria, Muhammadu Buhari, aimed in general to wash away corruption that has been plaguing Nigeria's oil industry and its state oil company, which is now under restructure process, and also as a consequence of a direct measure taken by Mr Buhari to end contracts to protect oil and gas facilities held by the previous government with militant rebel commanders and cut also payments and stipends to former commanders to avoid any future uprising like the one happening now, which looks like to be more violent and non receding any time soon, after in recent days, the Avenger top officials announced that it was not going to participate in any talks or deals with the government, until its demands were not complied nor dealt with, which in general relate to more oil revenues from the Delta Niger operations and more autonomy for the region, which hardly the Buhari government would abide for these demands, having also the cooperation of the international community by his side to combat and fight the BOKO HARAM and also it would be the possibility to request help to fight against The Avengers.

All these events in Nigeria have caused an important spike in oil prices levels, which in recent days reached new record highs of 50$ in the Brent benchmark, which along with recent outages in Canada due to severe wildfires, show that what happens with the nigerian oil industry it really means something for the world oil market, especially when one knows that the quality of their crude oils are between the best, very much needed and imported by the US, and which unfortunately is running the risk to be totally overtaken by Angola, now ranked as the african top oil producer and exporter to the western markets and also an important supplier to China. Maybe Angola which overcame and experienced a long civil war and insurgency clashes and currently with a flowing and thriving oil industry could teach some lessons and help Nigeria's government to deal with this important troublesome situation. 

And there is two crucial issues to discern or think about in the days and weeks to come, depending on how this situation evolve and if the government of Mr Buhari gets finally a talk with the Avengers, which relate to first of all, the behaviour of the rest of the OPEC members regarding the current situation in Nigeria and its huge energy security problem, since particularly thinking, its not enough to vote for a nigerian to be secretary general of the organisation, Mr Sanusi Berkindo, which could be seen as a consolation prize, but how nigerian lost oil production will be filled? Will there be true solidarity inside the OPEC with its troubled member? It might be a silly and naive question, but it is important to see this issue as well. Or on the contrary, with all this market share craziness and the law of the jungle existing as a rule of law in the bloc, other countries like Angola and the KSA will run to fill nigerian void. And most important of all, if oil production keeps this low, will Mr Buhari request to be out the OPEC similar to the Indonesia case in the past. Only time will tell, and well, of course, based on much of what the Avengers and the Nigerian government do to prevent Nigeria from becoming a net oil importer after being the 1 Africa's oil producer. And also, is there any foreign player benefiting from all this situation? Maybe the private security organisations hired by EXXON, CHEVRON? One could never know for real...

Myanmar and Oil

Sincerely, I am surprised by the impressive quantum leap Myanmar has been given on the news, leasding the rankings in economic growth in Southeast Asia and due to its important natural gas reserves off shore,it has been opening up to the world and poised to be a game changer in world oil geopolitics, and a prize to take between India, China, United States, in terms of which country can have the most important and the biggest shares of their oil blocks and revenues. China, apparently has taken the lead on this regard, being a close partner since the darkest times of the Junta, and still close to it, but now India also is watching close how events play out and pouring huge investments in the oil and gas sector, being Indians very interested in this country. 

But for Washington this will be hard to take and measure and evaluate, since it has got to know and have the wisdom to calibrate its own national interests, and the relationships between Beijing and Delhi and overall how this play out in the geopolitical puzzle of the region. And also, there´s Australia as well, as one of the most important energy players in the pacific region, which could serve well as the bargaining chip between all interested players towards Myanmar energy riches. 

Not to forget that according to the U.S. Energy Information Administration estimates the country, also known as Burma, had 10 trillion cubic feet of proven reserves and produced 421 billion cubic feet of the fuel The reserves are 1.9 percent of known deposits in the Asia Pacific, according to the EIA. So this is why Myanmar could have bigger geopolitical implications for the region than ever thought, now even more so when the issue about the South China Sea between China and Washington is surfacing again, and which holds huge and massive hydrocarbon reserves.

India, the next big global player in energy markets.

http://www.livemint.com/Industry/0Ztmh9bpOuo8cGpJR2x0TK/India-to-influence-global-energy-markets-IEA.html

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Oman, oil, geopolitics and great ambitions in the MENA region

The Sultanate of Oman, a rather humble and somewhat stealth tiny state in the Persian (Arabic) Gulf, is setting its own path in the regional dynamics, and it has a positive outlook so far, based mainly on its important oil and gas production growth, just about recently, in the last 2 years, averaging 1 million barrels per day, jumping from previous levels of 650 thousand barrels per day in 2007-2008 approximately. And this has been prompted by a relatively more stable landscape and internal political, economic and socio-religious environment to receive foreign investments, comparatively speaking to the rest of the countries in the Gulf hit hard by the low oil prices, even if now Oman also has been feeling the consequences of this situation, according to many regional information sources on this issue.

In this sense, Oman has been an important exporter of oil to asian markets, where according to the Energy Information Administration latest data, only China by itself accounted for the 70% of omani crude exports, making it its main partner on this field, and also India and Iran represent important clients in this regard. Also, Oman has an important role as gas producer in a region where natural gas only has Qatar as the champion as top reservoir and production. All the previous items have allowed the Sultan Qaboos to project Oman in a considerable and positive way in the decision making process and the regional geopolitics, by participating for example in the recent talks between United States, the EU, Russia and Iran over the nuclear deal, even this participation went somewhat unnoticed. Also, Oman all of a sudden has been called repeatedly by OPEC to participate in their previous meetings based on its exponential production growth and hence giving it more international exposure, where Oman has offered to cooperate actively over the stabilization of markets and prices, offering to cut production sometimes, but with no result whatsoever. But certainly, all this has given Oman a great opportunity to assume a role similar of that assumed before by other tiny states like Qatar, the UAE, with important and outstanding achievements so far.

Now with Iran ascendant in the regional arena and with a sectarian strife against Saudi Arabia scattering all across the MENA and the islamic world, where many countries have experienced clashes between sunnis and shias proxies in Bahrein, Lebanon, Iraq, Yemen, and with no end in sight, Oman certainly has all the positive outlook and seems like an oasis in the middle of the growing and continuing instability in the region, with few political and social risks being one of the most important and crucial the issue of succession since it has been known about the illness of current ruler Sultan Qaboos and all the speculations about who would be his immediate replacement, which could create a vacuum of power and be leveraged by outside powers to expand influence in the country. Even if Oman has not been suffering from the current sectarian strife so far, it has been suspected Iran has been strongly supporting Oman and even signed recently after sanctions were lifted, a deal on LNG supplies to Oman from Iran, being one of the first ones signed by iranian authorities so far. 

So Oman's future intentions and goals based on what it has been doing and carrying out so far will much depend on its political future, the status of its economy and how it will weather out the low oil prices environment and how it will leverage also to develop a "post oil" plan for the coming years, how it will have success to manage the regional dynamics of power and the tremendous shifting alliances, the future of Saudi Arabia, one of its neighbors and its relationship with Iran and important also for its future, how it will handle its relationship with outside powers like China, the U.S, and Russia, with growing ambitions in the Middle East. 

Libya, oil, ISIS and political risks

Libya today constitutes one of the most representative cases when it comes to watch and analyze oil and gas industry under the light of political and security risks. Ever since war and revolution erupted in the country with the intervention of NATO and France that led to the ousting and killing of former libyan leader Gaddafi, instability and chaos has reigned in the country and a fierce clash between different militias and armed private groups have surfaced with the control of the different oil and gas facilities as the main goal of these organizations wanting each one to have their share of the diminishing and declining oil production in the north african country, once in an overall situation of stability under the rule of Gaddafi and now under the threat of total destabilization and balkanization, with no effective unified government but 2 split authorities, between secularism and islamism each one located in the cities of Tripoli and Tobruk. And all this fighting hitting very hard and importantly its one and main source of incomes, its oil production, located at less than 1 million barrels per day.

And dealing with political and security risks regarding the oil industry directly, is linked with the consistent and repeated attacks by the different rebel and warring factions against ports, tanks, sabotaging pipelines, which undoubtedly will be increased now with the insertion in the "libyan landscape" of ISIS, which also aims at controlling the most vital and strategic oil facilities like the Es Sider Port and also the Ras Lanuf pipeline, adding up to the already damaged and destroyed libyan landscape, lacking so far a general consensus between the islamist different factions under the umbrella of Dawn and the support allegedly of Qatar and Turkey, also having the Ansar al Sharia, against the non jihadist groups like the Shield organization and the so called Petrolem Facilities Guard, being the main active groups in this mortal fight, and with ISIS also asserting itself in one of the most prominent oil city, like Sirtre, adding more pressure to all this worsening scenario.

Hence, this is what happens when oil business is affected by myriads and diverse political and security risks and applied to many other global hotspots like Yemen, Sudan, Iraq, etc, but which is not impacting heavily oil prices since even if libyan crude oil is of high quality, low sulphur, and sweet and very demanded in Europe, but which it has not reached high levels of oil production historically even under times of Muammar Gaddafi. Terrorism, sabotaging oil and gas facilities, kidnapping and killing sometimes of oil personnel in offshore and onshore facilities, are the most recurrent incidents regarding political and security risks right now in Libya and is scaring away investments and the remaining companies still operating in the country. 

So, with the perspective of another NATO intervention to root out ISIS off Libya in scenario provoked by the very initial intervention of the US NATO France alliance to topple Gaddafi, after many failed attempts of reaching a consensus on a unity government between the different warring groups, which is now endangering the intentions of the West to intervene once again in the country, then the stakes of growing political risks looks pretty much higher for Libya and its future in the global oil landscape, with important implications for the rest of foreign powers.