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Politics & economics - June 28

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China's crude oil import up 20.5 percent in May

Xinhua, People's Daily
China imported 12.4 million tons of crude oil in May this year, a rise of 20.5 percent from the same month a year ago, China Business News said on Tuesday, quoting latest statistics from the General Administration of Customs.

Meanwhile, China's crude oil export dropped by 48 percent in May, the report said.

Crude oil imports from Angola stood at 3.2 million tons in May, accounting for 25 percent of the country's total imports that month, it said.
(27 June 2006)
Related: China's automobile output exceeds 3 million in first five months of 2006


Iran ideological army takes on energy contracts

IranMania
Iran's powerful ideological army, the Revolutionary Guards, is set to enter the oil and gas sectors in a move that would increase their stake in the Islamic republic's economy, AFP reported.

"The Revolutionary Guards have obtained the contract to develop phases 15 and 16 of South Pars," a huge offshore gas field divided between Iran and Qatar, General Abdolreza Abed said in an interview with the Shargh newspaper.

Abed, who heads up the Guards' economic operations, said the contract was worth $2.09 bln.

The deal would be a major boost to the operations of the force, initially created after the 1979 Islamic revolution to protect the regime from foreign and domestic threats.
(28 June 2006)


Nigerian oil dispute flares into full-scale revolt

Reuters
Crude oil seeping from a gnarled steel wellhead forms a lake the size of a soccer pitch near the Nigerian village of Kegbara-Dere, but these oilfields have not exported a drop in 13 years.

The Ogoni tribe kicked Royal Dutch Shell out of this part of the Niger Delta in 1993 protesting that they had received nothing in return for four decades of oil production. Today, the same grievances are fuelling a revolt across the entire oil heartland of Africa's largest producer.

"If Shell never comes back, we would have lost nothing," says Young Kigbara, a member of the Movement for the Survival of the Ogoni People, surveying the pungent pool of oil and an abandoned pumping station nearby.

"We are better off without oil production."

Oil is the mainstay of the Nigerian economy, but has brought little benefit to the rural communities of Nigeria's far south where it is extracted.

Cut off from the national road and power networks, and deprived of basic schools and health care, delta inhabitants have responded by denying companies access to progressively larger tracts of land, containing billions of barrels of oil.

Nigeria has forfeited about 700,000 barrels of oil daily, equivalent to the total consumption of Turkey and worth $17 billion a year, because of this grassroots action, industry officials estimate.

And the situation is deteriorating rapidly.

Protests that began with peaceful Ogoni rallies have evolved into military-style raids, car bombings and kidnappings that forced Shell to shut down oilfields responsible for a quarter of the country's output in February.
(28 June 2006)


GAO: Issues Related to Potential Reductions in Venezuelan Oil Production
(PDF)
Jim Wells, Director of Natural Resources and Environment, GAO
Venezuela is the world's eighth-largest oil exporter and among the top 10 countries in total proven oil reserves. Venezuela also supplies about 11 percent of current U.S. imports of crude oil and petroleum products and wholly owns five refineries in the U.S. Consequently, Venezuela is a key player in the future energy security of the United States and the world.

The current global oil market is tight and may be more susceptible to short-term supply disruptions and higher and more volatile prices. Recently, tension between Venezuela and the United States has caused concern about the stability of Venezuelan oil supplies. On several occasions, Venezuela’s President has threatened to stop exporting oil to the U.S. or to close Venezuela’s U.S.-based refineries.

In this context, GAO analyzed: (1) how Venezuela’s crude oil production and exports of crude oil to the U.S. has changed in recent years, (2) the potential impacts of a reduction in Venezuelan oil exports to the U.S., and (3) the status of U.S. government programs and activities to ensure a reliable supply of oil from Venezuela. Commenting on a draft of the report, the State and Commerce Departments generally agreed with the report, but DOE contended that the report presents an “alarmist view” of U.S. energy security. We disagree and believe the report presents a contextually balanced treatment of the issue.

...

Most of Venezuela’s crude oil that is not consumed domestically in Venezuela is exported to the United States. The United States is a natural market for Venezuelan oil because it is so close—about 5 days by tanker to the U.S. Gulf Coast compared to about 30 to 40 days for supplies coming from the Middle East.
(27 June 2006)

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