Offers pile up to buy reserve crude

Strategic Petroleum Reserve

http://www.chron.com/disp/story.mpl/business/7634937.html

By JENNIFER A. DLOUHY, HOUSTON CHRONICLE

WASHINGTON — The government's auction of 30 million barrels of oil from the United States' emergency stockpile attracted more than 90 offers to buy the crude, the Energy Department announced Thursday.

Industry interest in the Strategic Petroleum Reserve oil was so high that the auction was "substantially oversubscribed," the department said, meaning bidders offered to buy more oil than is available.

Bids for the emergency oil were due Wednesday afternoon, and the government anticipates it will complete final contract awards by July 11.

The government did not say who placed bids for the light low-sulfur crude or what offers were deemed successful. But in an Energy Department conference call on the sale earlier this week, traders were seeking information along with refiners, signaling that some of the crude may not be headed immediately to refineries.

Successful bidders are permitted to store oil for later use or resale but may not export any of the stockpiled crude unless they return an equal volume of refined product to the U.S.

The flood of offers for the emergency oil surprised some market analysts, because the sale comes at a time when U.S. inventories are near record levels.

Storage tanks are full in part because of bottlenecks at a major oil hub in Cushing, Okla., which recently has begun receiving more Canadian crude via pipeline and more domestic crude from U.S. fields, including the Bakken Shale formation in North Dakota.

David Pursell, managing director of Houston-based investment bank Tudor, Pickering, Holt & Co., said the surge of would-be buyers could be a sign traders are bullish that oil prices will climb or that refiners are concerned about the availability of the light, sweet crude they prefer.

"The current market data says we're OK - we've got plenty of crude in inventory - and prices have been coming down, even before the release was announced," Pursell said. "So it didn't feel like there was a panic."

But, he added, there may be fear that supplies could tighten, especially if Saudi Arabia isn't able to ramp up its production as quickly as planned.

Although bids were not disclosed Thursday, the cost of the emergency oil is indexed to Light Louisiana Sweet crude prices, which are provided by Petroleum Argus, and have been around $112 per barrel.

Contracts for August delivery of the U.S. benchmark, the lower quality West Texas Intermediate crude, rose 65 cents to $95.42 in trading Thursday.

The Obama administration announced last week it was releasing from the Strategic Petroleum Reserve half of the 60 million barrels that the U.S. and the International Energy Agency's other 27 member nation's committed to put on the market.

Administration officials said the move was essential to restoring stability to the market and offsetting the loss of 1.5 million barrels of high-quality light, sweet crude oil daily from strife-torn Libya during the summer driving season.

Politically motivated?

But Republican critics have assailed the decision as unwise and politically motivated.

On Thursday, U.S. Rep. Pete Olson of Sugar Land and five other Texas Republicans were among 26 GOP lawmakers who blasted the move as evidence that U.S. energy policy is off track.

"Current high pump prices are hurting families, businesses and the economy, but politics should not guide a decision to use a national security asset to address the problem," the lawmakers said. "The best solution to our nation's energy problem is to adopt federal regulatory and approval processes that promote the safe and efficient development of our vast American resources."

The lawmakers also insisted that the administration explain how it plans to replace the released oil.

Disputed program

The Interior Department last year ended a controversial program that allowed companies to give the U.S. actual crude - instead of cash - to pay royalties for drilling on federal land. That royalty-in-kind program had been used to supply the reserve in the past but had been criticized for mismanagement and poor accounting practices.

The high demand for the reserve oil stands in contrast to a lackluster response to the last Strategic Petroleum Reserve auction. After Hurricane Katrina damaged pipelines, offshore rigs and refineries in 2005, the U.S planned to sell 30 million barrels of crude from the reserve, but ultimately auctioned off just 11 million barrels.

Winning bidders of the SPR oil must arrange for transport of the crude to tankers, onshore storage or refineries.

jennifer.dlouhy@chron.com

Read more: http://www.chron.com/disp/story.mpl/business/7634937.html#ixzz1QonFtLRH

OPEC to Cut Supply on Slower Asian Demand, Oil Movements Says

http://www.bloomberg.com/news/2011-06-30/opec-to-cut-supply-on-slower-asian-demand-oil-movements-says.html
By Grant Smith

OPEC will cut oil shipments through to the middle of July as Asian refiners reduce imports while conducting seasonal maintenance work, according to tanker- tracker Oil Movements.

The Organization of Petroleum Exporting Countries will ship 22.7 million barrels a day in the four weeks to July 16, down 0.7 percent from the period to June 18, the consultant said in a report. The data, which excludes Ecuador and Angola, does not reflect any change in OPEC output in response to the International Energy Agency’s release of emergency stockpiles, Oil Movements said.

“Demand is diminished relative to what might have been expected and it’s mainly happening in the east,” Roy Mason, the founder of Oil Movements, said by telephone from Halifax, England. “They’re getting towards the peak of the maintenance season in the east, so it may be a temporary lull.”

The Paris-based International Energy Agency, an adviser to 28 oil-consuming nations, said June 23 its members will offer 60 million barrels of oil, the first deployment of strategic stockpiles in five years, after OPEC failed on June 8 to announce a plan on making up for halted Libyan exports. Saudi Arabia pledged that day to keep consumers supplied in the absence of an OPEC accord.

Shipments from Middle Eastern producers, including non-OPEC members Oman and Yemen, will drop 0.9 percent to 17.44 million barrels a day in the period, the report showed.

Crude on board tankers will average 485.44 million barrels in the four weeks, down 0.8 percent from 489.41 million barrels in the period to June 18, Oil Movements said.

Oil Movements calculates shipments by keeping a tally of tanker-rental agreements. Its figures exclude crude held on board ships as floating storage.

OPEC’s members are Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela. Iraq is exempt from the group’s quota system.

To contact the reporter on this story: Grant Smith in London at gsmith52@bloomberg.net

To contact the editor responsible for this story: Stephen Voss at sev@bloomberg.net

Statoil books VLCC to store oil in US Gulf, first in weeks

http://af.reuters.com/article/energyOilNews/idAFL3E7HS0E320110628

By Randy Fabi

SINGAPORE,(Reuters) - Norwegian energy firm Statoil has booked a Very Large Crude Carrier to store oil offshore in the U.S. Gulf of Mexico, the first such fixture for several weeks, shipbrokers said on Tuesday.

The VLCC, which can carry as much as 2 million barrels of crude oil, was booked for floating storage for 30 to 40 days at $32,000 per day, according to fixture reports.

Statoil will most likely store crude oil on the vessel, but could also be using it for fuel oil, said a Tokyo-based shipbroker.

It was not clear whether Statoil's fixture was a one-off move or the start of an industry-wide trend following a decision by industrialised nations last week to tap into their strategic petroleum reserves (SPR) for only the third time in history.

"Short term storage, in the form of charterers opting for two to three weeks of demurrage for cargoes already en route or fixed to the U.S. Gulf, can easily become profitable as the SPR sales near the end," said broker firm Charles R. Weber.

The freight market is watching closely for signs of a revival in floating storage demand, which hit a peak in 2009 during the oil market's super contango, to help soak up excess tonnage and boost shipping rates.

Brent crude futures LCOc1 joined its U.S. counterpart CLc1 into contango last week after the IEA said its members would release up to 60 million barrels of oil over the next 30 days.

The contango, a market structure where the front-month contract is cheaper than contracts for later delivery, was not steep enough yet to attract large interest for floating storage, analysts said.

"The differential on NYMEX, now showing a carry of about $6 a barrel out to August 2012, is not sufficient to induce a spree of VLCC charters for storage," said Barry Parker, a shipping analyst for Capital Link Shipping.

"This contrasts with early 2009 when ... you had far bigger differentials like $20 a barrel and higher to induce the carry trades," he added.

The head of Lloyds oil division told Reuters this month that the super contango of 2009 would likely recur again and could be an even bigger phenomenon next time around because of extensive investment in storage infrastructure. (Reporting by Randy Fabi; Editing by Ed Lane)

Marathon Petroleum to Go Public at $14 Billion Valuation as Gasoline Jumps

http://www.bloomberg.com/news/2011-06-30/marathon-petroleum-to-go-public-at-14-billion-valuation-as-gasoline-jumps.html
By Joe Carroll and Bradley Olson

Marathon Oil Chief Executive Officer Clarence Cazalot. Photographer: Tim Boyle/Bloomberg

Marathon Petroleum Corp. is set to debut on the New York Stock Exchange tomorrow as the second- largest U.S. independent oil refiner after surging gasoline prices drove a year long rise in refining stocks.

Marathon Petroleum is being spun off from parent Marathon Oil Corp. (MRO) amid growing investor demand for companies that can capitalize on gasoline prices that rose at twice the rate of crude oil in the past 12 months, said Sam Margolin, an analyst at Dahlman Rose & Co.

The refiner is valued at $14 billion in unofficial trading permitted by exchanges to help investors gauge demand, on par with the largest independent refiner, Valero Energy Corp., which has twice the fuel-making capacity. Marathon Petroleum is poised to capture higher margins thanks to upgrades at plants that account for half the company’s oil processing, said Jacques Rousseau, an analyst at RBC Capital Markets LLC.

“It’s seen as a new name in a group of companies that have run up aggressively in the past year, and people think it’s an opportunity to buy a stock that doesn’t have a chart showing a year’s worth of massive gains behind it,” said Margolin in a telephone interview from New York.

Marathon Oil Chief Executive Officer Clarence Cazalot in January revived a plan to split off the refining division after years of frustration that the fuel-producing unit was a drag on the value of the company’s more profitable crude and natural-gas business. Cazalot, a former exploration chief at Texaco Inc., canceled the original spinoff in February 2009 after the global financial collapse deflated equity markets.

Since then, Marathon Oil has sold off $1.9 billion in refining, storage, pipeline and retail assets, including a plant in Minnesota, and hundreds of convenience stores. The margins earned in the U.S. from processing crude into fuels during that time almost tripled as the recession ended and energy demand rebounded.

Iraq, Indonesia

Since assuming the top job at Marathon Oil when it was spun off by U.S. Steel Corp. in 2002, Cazalot, 60, has quadrupled net income and expanded the company’s search for oil and gas to Iraq, Indonesia and Poland. On June 1, the company agreed to pay $3.5 billion to Hilcorp Resources Holdings LP for Texas leases that may add the equivalent of 100 million barrels of crude to its reserves by the end of this year.

As a result of the transaction, Cazalot raised his production-growth estimate through 2016 to 5 percent to 7 percent a year from a previous forecast of 3 percent to 5 percent.

Marathon Oil posted share price gains averaging 7 percent for the past five years, lagging Los Angeles-based Occidental Petroleum Corp. and Anadarko Petroleum Corp. of The Woodlands, Texas, which rose 17 percent and 10 percent a year, respectively. Neither Occidental nor Anadarko engage in refining.

Detroit Upgrade

Marathon Petroleum’s margins probably will widen starting in late 2012 after the completion of a $2.2 billion upgrade to the company’s Detroit refinery that will boost its ability to process cheaper crude, RBC’s Rousseau said in a telephone interview.

The Detroit project will increase the refinery’s capacity to handle heavy crude from Canada’s oil sands to 100,000 barrels a day from 20,000 barrels, Rousseau said. Heavy Canadian crude sells for 20 percent to 30 percent less than the lighter types of oil from the Gulf Coast that the Detroit refinery currently primarily runs, he said.

Rousseau, who has an outperform rating on Marathon Petroleum, estimates the Detroit upgrade will add $1 to Marathon Petroleum’s annual per-share earnings. He expects the shares to reach $50 within a year.

“There’s a lot to like with this story,” Rousseau said.

Refining Consolidation

As a stand-alone refiner, Marathon Petroleum will have more volatile earnings than its parent because retail fuel markets tend to fluctuate seasonally, said Ted Harper, an asset manager at Frost Investment Advisors in Houston, who helps manage about $6.8 billion. Frost Investment is a subsidiary of Cullen/Frost Bankers Inc. which held 23,797 Marathon shares as of a March 31 filing.

“They may need to smooth out their earnings stream,” Harper said. Marathon should expand its refining base through acquisitions, or add to its logistics business, which includes the largest U.S. barge fleet, he said.

The U.S. refining industry has consolidated in the past six years as fuel makers, faced with soaring crude costs, cut operating expenses and shed their least-efficient plants. The transactions have included Valero’s 2005 acquisition of Premcor Inc., Western Refining Inc.’s purchase of Giant Industries Inc. in 2007, and Holly Corp.’s planned merger with Frontier Oil Corp., which is expected to close tomorrow.

Texas City

Marathon Petroleum may seek to buy BP Plc’s Texas City refinery near Houston, the biggest U.S. plant ever to be sold as a single asset, said Neil Earnest, practice leader of merger’s and acquisitions at Muse, Stancil & Co., a consulting firm in Dallas.

BP’s Texas City refinery is the third-largest in the U.S. by virtue of 475,000 barrels of daily crude-processing capacity, according to Bloomberg data. The plant is larger than anything in Marathon’s refining portfolio and would provide the ability to export diesel to South America, Earnest said.

BP will have to lower its $2.9 billion asking price for the Texas City refinery before Marathon Petroleum could afford it, said Mark Sadeghian, senior director of energy at Fitch Ratings in Chicago.

Marathon Petroleum will trade under the symbol MPC on the New York Stock Exchange.

To contact the reporters on this story: Joe Carroll in Chicago at jcarroll8@bloomberg.net; Bradley Olson in Houston at bradleyolson@bloomberg.net

To contact the editor responsible for this story: Susan Warren at susanwarren@bloomberg.net.

Libya's new energy minister: Output at 20K barrels

http://www.msnbc.msn.com/id/43584072/ns/business-oil_and_energy/



TRIPOLI, Libya — Libya's newly appointed energy minister says the country is now producing just 20,000 barrels of oil per day, a fraction of prewar output.

Omran Bukra told reporters Wednesday that the OPEC member nation still has millions of barrels of crude oil in storage, however. He didn't say exactly how much.

Libya was producing about 1.7 million barrels of crude daily before an uprising began in February pitting rebels in the east against government troops loyal to leader Moammar Gadhafi.

Government spokesman Moussa Ibrahim says Bukra was appointed energy minister earlier this week. His predecessor, Shukri Ghanem, said early this month that he had defected and now supports the rebels.

OPEC Calls on IEA to Avoid Oil Releases

http://online.wsj.com/article/SB10001424052702304584004576415552407285570.html

By BENOIT FAUCON

VIENNA—OPEC's top official said Wednesday he wants to mend fences with the International Energy Agency and avoid a repeat of a release of oil from stockpiles that has strained consumer-producer relations.

Abdalla Salem El-Badri, secretary general of the Organization of Petroleum Exporting Countries, said he hoped to set up a sit-down meeting with IEA Executive Director Nobuo Tanaka to discuss better coordination between consumers and producers. "We don't want this to be repeated," Mr. El-Badri said of the IEA's controversial release.

Mr. El-Badri said he would tell Tanaka, "Let us not disturb the market." Still, Mr. El-Badri's remarks Wednesday struck a more conciliatory tone than earlier in the week, when he joined other OPEC figures in sharply criticizing the IEA move. The IEA Thursday surprised markets by initiating an emergency release of 60 million barrels, pushing down oil prices and generating near-universal criticism from OPEC figures.

"Maybe [IEA's executive director Nobuo Tanaka] will come here [in Vienna or] I will go there and try to discuss the aftermath of this decision," Mr. El-Badri said.

The Paris-based IEA represents the governments of oil-consuming countries. Mr. El-Badri's Vienna office includes a prominent photograph with Tanaka in which the two men are seen smiling.

Mr. El-Badri said he wasn't trying to stop the planned release. "It's a decision, it's taken, it's over," he said. "I hope this will be the first and the last."

Mr. El-Badri said no plans had been finalized to meet Mr. Tanaka. But he said his message would be that consumers and producers should work together closely in case of sudden disruptions to supplies, saying OPEC members are always ready to supply market needs.

"We are partners in this business," he said. "I would like to assure him that we are ready...to supply the market," he said.

Mr. El-Badri made reference to statements by some OPEC members that signaled they would boost output to meet increased demand after a June 8 OPEC meeting disintegrated in disagreement. Despite the outcome of the June 8 meeting, "some of our member countries...are ready to add more oil into the market," Mr. El-Badri said.

"The IEA didn't give time for those countries to fulfill their commitments," he added.

Mr. El-Badri said he did have a conversation with Mr. Tanaka in the early days of the Libyan crisis.

"We had a telephone call during the Libyan crisis at the time" but "both of us thought that the problem would not last for more than two months," he said.

Although Mr. El-Badri read IEA comments in the press that suggested a possible release, he said he wasn't informed by the IEA of the agency's intent to release some of its stocks ahead of last Thursday's move.

"They didn't tell me they wanted to release this quantity," he said. Mr. El-Badri said he had been planning to meet with Tanaka in recent weeks on other business, but the two never managed to get together.

"Mr Tanaka [was] supposed to come here. He [wanted] to visit Vienna...but he was not able to come," he said.

Mr. El-Badri said he didn't foresee any emergency OPEC meeting before a scheduled gathering in December.

"We have a December meeting. There is no emergency meeting in our radar at this time."

Write to Benoit Faucon at benoit.faucon@dowjones.com

For Once A Legitimate Ghanaian Oil Company Success Story

http://www.ghanaweb.com/GhanaHomePage/NewsArchive/artikel.php?ID=211861

After the recent announcement by Tullow oil about its agreement with EO Group, the only Ghanaian partners in the Jubilee oil field, Ghanaians are re-thinking the notion that the NDC Party is anti-business and bitterly vindictive of businessmen who are perceived to be aligned with their opposition parties.

The Mills administration, therefore, has a unique opportunity to not only win hearts within the business community by granting the needed consent of this transaction, but to also score valuable points in the area of political harmony that Ghanaians cherish.

The transaction which is still subject to government’s approval is going to be the first of its kind and will vindicate the Ghanaian authorities about the false impression created by some as only being interested in the Chinese companies to invest in oil and gas assets in Ghana.

Furthermore, it would render credible President Mills’ recent call on Ghanaian indigenes to participate in the emerging oil and gas industry. Thus a government approval of this transaction should attract the praise that it deserves.

Tullow Oil which is the operator of the Jubilee field also deserves recognition for taking unprecedented steps towards sharing its investment gains with Ghanaians by listing on the Ghana Stock Exchange and making the commitment to invest more in Ghana through the acquisition of EO Group’s interest.

Is clearly a positive indication of a company which has a long-term interest in the community within which it operates and demonstration of profound corporate responsibility, a culture that is in scarce supply among the International Oil Companies operating in Africa.

Once the government has shown its sincerity, and Tullow Oil has shown its commitment to developing Ghanaian participation, it would be the turn of EO Group to set a worthy example by re-investing some of its dividend in the Ghana economy.

As the first Ghanaian major private stakeholder in the Jubilee Field, they have both the moral and business responsibilities to give back to the community. All told, experts estimate EO Group’s returns to be about $75- million dollars after paying expenses, liabilities and applicable taxes.

To this end, it would be prudent on the part of the government to encourage them to re-invest a significant portion back into the Ghanaian economy. For a country known to go around the world with hat in hand, it would be a shame if this amount of local capital ends up in foreign banks.

Although, we have been reliably informed about EO Group’s intentions to re-invest in the community as part of their long held belief boosting corporate Ghana the government would still have to make sure they are encouraged to do so much in the same manner it encourages foreigners to invest in our country.

If investments mean jobs, and Ghanaians need jobs, the government and the EO Group should both be looking at investing that level of capital locally.

Some of the areas the EO Group is said to be interested in investing some of its returns are in the Science and Technology fields. The EO Group foresees significant Ghanaian equity ownership and skilled participation in businesses springing off from our emerging oil and gas industry.

They are also said to be interested in making substantial investment in the health care sector, an area that one of the partner’s already has a long history of helping the community particularly in the rural areas.

In spite of all the misinformation that has been peddled in the past about the EO Group, theirs is indeed a real life success story, and all Ghanaians should be encouraged by this recent development involving Tullow Oil and the Ghana government to get involved not only in oil and gas but all of the other sectors of the economy yet to get off the ground.

Consequently, this recent attempt by some in the government to cause commercial damage not only to the EO Group but to the rest of the nation by pursuing a very weak, old, and rehashed legal case is not in the interest of our country. Cooler heads must prevail to readjust the government’s stance on this issue.

By Ghana Oil Watchdog Chairman ,Mumuni Adams Fusseni Cincinnati Ohio - USA

President Mills solidifies oil deal with Equatorial Guinea

President Mills has met his Equatorial Guinean counterpart, Teodora Nbiang Nguema Mbasogo on the sideline of the 17th session of the AU Summit in Malabo.

http://gbcghana.com/index.php?id=1.334000.1.446974

Issues discussed bordered on an oil deal between the two countries. President Mbasogo assured President Mills of his willingness to continue supplying crude oil to Ghana.

Our correspondent also spoke about the Peer Review Session and President Mills’ meeting with the Ghanaian community in Malabo.

He said President Teodora Nbiang Nguema Mbasogo has shown commitment that his country is prepared to also join the APRM because of the good things that are coming out of the APRM.

The President later met with the Ghanaian Community in Malabo and according to our correspondent, the major problem that was put forth was the issue of legal documents to live and work in Equatorial Guinea. This they said have resulted to either money being extorted from them with the pretext of securing them jobs or finding themselves in the grip of the police.

There are about 1000 registered Ghanaians in Equatorial Guinea out of the over 3000 that are living there.

Equatorial Guinea is sub-Saharan Africa’s third largest oil producer and for that matter attracts a lot of migrants into the Country.

GBC

Senate confirms Alison-Madueke, Rufa'i, 5 others as ministers

http://234next.com/csp/cms/sites/Next/Home/5724235-146/story.csp

By Emmanuel Ogala


The Senate on Wednesday confirmed the nomination of seven of the 34 ministerial nominees sent by President Goodluck Jonathan following a screening process that lasted for hours.


Mr Jonathan had, last Tuesday, sent the list for confirmation. The approved nominees include Emeka Wogu (Abia), Bala Mohammed (Bauchi), Diezani Alison-Madueke (Bayelsa), and Godsday Orubebe (Delta). Others are Onyebuchi Chukwu (Ebonyi), Caleb Olubolade (Ekiti), and Ruqayyatu Rufai (Jigawa).


Although the screening exercise generally took place without drama, it was evident Mrs Alison-Madueke and Mr Mohammed received preferential screening.


Mrs Alison-Madueke was listed third on the order of appearance by the Senate, but she appeared on the sixth turn, four hours after her turn had passed.

She was meanwhile outside the door of the Senate chambers, meeting and lobbying senators one after the other.

The opinion-swaying session was mediated by Smart Adeyemi (PDP, Kogi State) who recently claimed some major oil dealers have been lobbying some senators to block Mrs Alison-Madueke's nomination. Mr Adeyemi had also staged a counter lobby to ensure Mrs Alison-Madueke's chances of confirmation by the Senate are not hurt by reports of corruption against her.

Mrs Alison-Madueke, 51, from Bayelsa State, an architecture graduate, is pencilled for re-appointment as petroleum minister where she has spent the last one year. Her one year reign at the petroleum ministry is characterised by series of corruption allegations serially reported by this paper in several editions.

At the rostrum before the Senate as the sixth candidate, Mr Adeyemi was the first senator the Senate president, David Mark, called up to question her. Philip Aduda Taminu (FCT Abuja) was next. They had all met the nominee outside the chambers before her screening.

Ahmed Lawan (ANPP, Yobe State) interrupted by asking the nominee questions bothering on her disregard for due process. Thereafter, the Senate president returned to picking for her senators who carefully avoided questioning her about all the allegations against her in the media.

Ayogu Eze (PDP, Enugu State) led that batch. He had also met Mrs Alison-Madueke outside the Senate chambers during her lobbying session on the invitation of Mr Adeyemi.

Mr Ayogu praised the nominee for having "thick skin" to absorb the "barrage" of "blackmail" in the media arising from her stance on the passage of the Petroleum Industry Bill (PIB).

"I have found it most unfortunate," Mrs Alison-Madueke said, while denying allegations against her for the first time since she was first mentioned in a corruption scandal in 2008.

She denied reports that any Senate report indicted her for corruption and said she has documents to prove she followed due process in all her dealings as petroleum minister.

"There is nothing as a briefcase company, as has been alleged in some papers," she said, adding that she was just following the Nigerian Local Content Law which, according to her, encourages any Nigerian with the basic requirement to participate in Nigeria's oil industry.

"We are opening up the gas sector to all Nigerians who meet the basic criteria, and that is the way it should be and that is the way it would be going forward," she said.

Further questioning by Abdul Ningi bothering on her integrity was shouted down by some senators who quickly added "bow and go" chants and the Senate president eased her off the chamber.

Mrs Alison-Madueke was not the only candidate given preferential treatment in an obvious contradiction to claims by the Senate leader, Victor Ndoma-Egba, that the Senate was going to thoroughly screen the nominees and treat them all equally.

Mr Mohammed, the former minister of the Federal Capital Territory, also received the "bow and go" treatment from the Senate. Mr Mohammed, before his appointment into the executive cabinet, was an opposition senator representing Bauchi State.

Promises for Nigerians

Mrs Alison-Madueke attributed the scarcity of kerosene nationwide to activities of some independent marketers.

She said because kerosene imported into the country for household use had the same specification as the aviation kerosene, some marketers were buying the product at the household rate and re-selling to consumers in the aviation sector at a more expensive rate. She, however, gave the assurance that the scarcity would ease off in no time.

She also said the Nigeria Content Act had opened a new vista for Nigerians to participate in the oil and gas sector, although some multinational companies were adverse to its implementation.

"The Act has encouraged every Nigerian to come into the oil and gas sector," she said. "I must say that the Act has opened up oil and gas industry to Nigerians who have the capability to invest."

She said with the sustenance of the present reform in the industry, one million jobs would be created in the oil and gas sector over the next five years.

Mr Chukwu, who spoke about the need to review the National Health Insurance Scheme (NHIS), said it was regrettable that less than two per cent of Nigerians were presently covered by the NHIS. He said if the percentage could rise to 30 by 2015, "we would have achieved a major feat."

Mr Mark wished the confirmed nominees well in their endeavours, saying he would make more comments after the exercise.

Nigeria’s Oil Bill Needs a ‘Little Review’ Before Passage

Diezani Alison-Madueke / Nigerian Energy Minister

http://www.bloomberg.com/news/2011-06-29/nigeria-s-oil-bill-needs-a-little-review-before-passage-1-.html

By Elisha Bala-Gbogbo

Nigeria needs to review a new bill which will regulate how the government runs the oil industry of Africa’s top producer before it is passed into law by parliament, a former energy minister said.

Energy companies’ concerns that the proposed law will make investments in deep water oil fields unprofitable have been addressed, former energy minister Diezani Alison-Madueke told lawmakers today in Abuja, the capital. The bill still needs “a certain amount of reviewing” before it is passed, she said.

Alison-Madueke and seven others were approved by parliament as ministers in President Goodluck Jonathan’s new cabinet, according to today’s proceedings.

The Petroleum Industry Bill, which will reform the way the oil industry is funded and regulated, has been in the legislature for more than two years, stalling new projects in the industry as producers including Royal Dutch Shell Plc (RDSA) and Total SA (FP) backed away from investment until the law is passed.

Nigeria is the fifth-biggest source of U.S. oil imports. Shell, Exxon Mobil Corp., Chevron Corp. (CVX), Total and Eni SpA (ENI) run joint ventures with the state-owned Nigerian National Petroleum Corp. that pumps about 90 percent of the country’s crude.

To contact the reporter on this story: Elisha Bala-Gbogbo in Abuja at ebalagbogbo@bloomberg.net

To contact the editor responsible for this story: Stephen Cunningham at scunningha10@bloomberg.net

With President Hugo Chavez in Cuba, Venezuela cancels summit

http://www.latimes.com/news/nationworld/world/la-fg-venezuela-chavez-20110630,0,1853548.story


Chavez, who was to have presided over the Latin America and Caribbean Summit on Development and Integration next week, is recovering from surgery in Cuba; there has been little information about his illness.

Fidel Castro of Cuba, left, and Venezuela's President Hugo Chavez speak Tuesday in an unknown location in Havana, shown in this photo released by Granma newspaper. Chavez underwent surgery in Cuba on June 10 and little has been revealed about his illness.

By Merry Mogollon and Chris Kraul, Los Angeles Times


Reporting from Caracas, Venezuela, and Bogota,— Casting more uncertainty on the health of President Hugo Chavez, Venezuela's Foreign Ministry announced Wednesday that it has canceled a summit of foreign leaders scheduled for next week that Chavez was to have presided over to mark Venezuela's bicentennial independence celebration.

The ministry statement said the Latin America and Caribbean Summit on Development and Integration would not be held because Chavez is in a "process of recuperation and extremely strict medical treatment" in Cuba.

The summit, set for July 6-7 on Margarita Island, was to have followed a massive state celebration still scheduled for Tuesday to mark the nation's 1811 independence. It is not known whether Chavez will return by Tuesday.

Since announcing that Chavez had undergone surgery in Cuba on June 10 to remove a "pelvic abscess," the Venezuelan government has said nothing about the nature of his illness or when he might return. The lack of information has led to speculation on the nature of Chavez's illness and whether he will be able to resume his duties or run for reelection next year. Officials have denied that Chavez has cancer.

Venezuelan and international news media have had little to report in recent days, except for such comments as the cryptic remark last weekend by the president's brother, Adan Chavez, that followers of the nation's leader should be ready to take up arms to defend the revolution. He did not elaborate or suggest against whom.

On Tuesday, the Cuban government released a video showing Chavez, appearing healthy if a bit thinner, talking with Fidel Castro in Cuba and showing a Tuesday copy of the Cuban state newspaper Granma.

There had been talk that Chavez would return home in time to preside over the summit and host various regional leaders, including Brazilian President Dilma Rousseff and Argentine President Cristina Fernandez de Kirchner. The government statement Wednesday said that the summit would be rescheduled before the end of the year.

Mogollon, reporting from Caracas, and Kraul, reporting from Bogota, are special correspondents.

US OIL INVENTORIES: Crude Stocks Fall More Than Expected

http://online.wsj.com/article/BT-CO-20110629-709328.html

NEW YORK (Dow Jones)--U.S. crude inventories fell by more than analysts' expectations last week, according to data released Wednesday by the U.S. Department of Energy.

Crude oil stockpiles fell 4.4 million barrels to 359.5 million barrels, compared with an average survey estimate of an 1.6 million-barrel decline. The American Petroleum Institute, an industry group, reported a 2.7 million-barrel draw in its weekly report released late Tuesday.

Oil futures rallied following the report, with light, sweet crude for August delivery recently trading up $1.23, or 1.3%, to $94.12 a barrel on the New York Mercantile Exchange. July reformulated gasoline blendstock, or RBOB, traded up 4.83 cents, or 1.7%, to $2.9379 a gallon and July heating oil recently advanced 5.8 cents, or 2.1%, to $2.8837 a gallon.

Stockpiles at Cushing, Okla., fell 500,000 barrels to 37.5 million barrels.

Gasoline stockpiles fell 1.4 million barrels to 213.2 million barrels, the department's Energy Information Administration said in its weekly report, compared with a 100,000-barrel increase forecast in a Dow Jones Newswires survey of analysts.

Distillate stocks, which include heating oil and diesel fuel, rose 300,000 barrels to 142.3 million barrels, compared with analysts' forecast of a 1 million-barrel increase.

Refining capacity utilization fell 1.1 percentage points to 88.1%. Analysts had expected a 0.2-percentage-point increase.

API pegged refinery utilization at 86.5% last week, unchanged from the previous week. The industry group reported stockpiles of gasoline were flat, while distillates fell by 900,000 barrels.

U.S. Oil Inventories:
For week ended June 24:
Crude Distillates Gasoline Refinery Use
EIA data: -4.4 +0.3 -1.4 -1.1
Forecast: -1.6 +0.1 +1.0 +0.2

Figures in millions of barrels, except for refining use, which is reported in percentage points. Forecasts are the average of expectations in a Dow Jones Newswires survey of analysts earlier in the week.

-By Dan Strumpf, Dow Jones Newswires; 212-416-2818; dan.strumpf@dowjones.com

Greece Passes Austerity Plan; 155 For Vs 138 Against

http://online.wsj.com/article/BT-CO-20110629-707786.html

ATHENS (Dow Jones)--Greece's parliament has passed a controversial five-year austerity plan that the country has promised its international creditors.

Voting mostly along party lines, the measure passed with 155 deputies voting for the measure, 138 against and with seven members not casting a vote, according to the president of the Greek parliament.

Although the Socialists won the vote, they suffered one defection who was immediately expelled from the party. One opposition lawmaker with the main opposition New Democracy party voted with the Socialists.

Passage of the additional EUR28.4 billion in spending cuts and new taxes has been set as a condition for another international bailout to keep Greece from defaulting on its debt.

The outcome is a relief for Prime Minister George Papandreou, who has been working hard to ensure that wavering deputies from his own party voted with their party.

"We have to do anything necessary to avoid the country collapsing," Papandreou said just before the voting.

He said that failure to approve the measures would cause the country to run out of money. He also warned that there was "no plan B" if the measures did not pass and that Greece would be "sold off" by its international creditors.

Greece faces another critical test Thursday, when parliament will hold an article-by-article vote on the legislation implementing the austerity plan and a promised EUR50 billion privatization program.

But with the overall outlines of the austerity plan expected to pass Wednesday, the vote on the implementing legislation is expected to be a formality.

-By Alkman Granitsas, Dow Jones Newswires, +30 210 331 2881

alkman.granitsas@dowjones.com

Oil higher after Greeks pass austerity measure

http://finance.yahoo.com/news/Oil-higher-after-Greeks-pass-apf-1041118613.html?x=0

Oil above $93 per barrel as Greeks pass austerity plan, but still on track for quarterly loss

Chris Kahn, AP Energy Writer,

NEW YORK (AP) -- Oil is higher after Greece took a key step towards avoiding a default on its debt and bolstering its flagging economy.

Benchmark West Texas Intermediate crude for August delivery added 84 cents to $93.73 per barrel on the New York Mercantile Exchange.

Since April, however, oil has dropped about 13 percent and is on pace for its first quarterly decline in a year.

Prices slipped from early morning highs after Greek lawmakers approved an austerity plan that's required to receive the next installment of an international aid package. But a weaker dollar kept oil higher. Oil, which is priced in dollars, tends to rise as the greenback falls and makes crude barrels cheaper for investors holding foreign currency.

Meanwhile, retail gasoline prices fell to $3.543 per gallon. In early May, the national average approached $4 per gallon.

Oil gains on hopes for demand

http://www.marketwatch.com/story/oil-futures-edge-back-up-in-electronic-trade-2011-06-28?link=MW_latest_news

By Claudia Assis and Sarah Turner, MarketWatch

SAN FRANCISCO (MarketWatch) — Oil futures edged higher on Tuesday as investors anticipated a decrease in U.S. weekly inventories and saw a glimmer of hope in the housing sector and a higher U.S. stock market.

Crude for August delivery /quotes/zigman/2075824 CL1Q +1.05% rose 50 cents, or 0.6%, to $91.15 on the New York Mercantile Exchange. Oil settled at its lowest settlement in four months in the previous session. Read more on Monday's oil move.

Worries about future demand for oil amid signs of softening economic growth, as well as oversupply concerns in the wake of an emergency release of oil from member countries of the International Energy Agency, have pressured oil prices in recent sessions.

“There’s a lot of uncertainty at the moment, but the two major things are the euro zone and the future of the US economy after (the second round of quantitative easing)”, said Alexander Poejel with JBC Energy.

Meanwhile, the IEA move came under criticism from the Organization of the Petroleum Exporting Countries.

OPEC Secretary General Abdalla El-Badri said late Monday after a meeting between OPEC and European Union officials he saw “no reason“ for the release since there was no emergency.

Closer to home, the S&P/Case-Shiller index rose 0.7% in April, paring its on-year decline to 4%. Read more about the housing index.

Europe’s benchmark Brent crude futures also traded higher, with the August contract rising $1.95 to $107.95 a barrel on ICE Futures London.

Still, analysts were of the view that oil prices have further to fall.

“We continue to believe that the short-term bias in most commodity complexes will be lower still, although the rate of decline may start to flatten out as prices start approach more reasonable valuations,” they said.

Investors get a first glimpse of oil inventories later Tuesday, when The American Petroleum Institute releases its weekly data on supplies. That precedes the more closely followed report from the Department of Energy due Wednesday.

Analysts polled by Platts expect both reports to show crude oil stocks down 1.7 million barrels, gasoline inventories up 700,000 barrels, and distillates stocks up 1.8 million barrels.

3 die in attack on Nigerian customs office

http://www.boston.com/news/world/africa/articles/2011/06/28/3_die_in_attack_on_nigerian_customs_office/
MAIDUGURI, Nigeria — Suspected members of a radical Muslim sect attacked a customs office yesterday in northeast Nigeria, killing at least three people in a brazen daylight assault highlighting the continuing insecurity of the oil-rich nation.


Authorities quickly blamed a group known locally as Boko Haram, which was also blamed for an attack Sunday night that left at least 25 people dead at beer parlors in Nigeria’s Muslim north. The group wants strict Sharia law implemented across the region.


Yesterday’s attack hit the customs office as officials inside held a meeting, said Major General Jack Okechukwu Nwaogbo, commander of a task force targeting Boko Haram. The assault included bomb blasts and gunfire and killed three people outside the building, he said. At least two customs officials were wounded.

Nigeria’s Bourse Targets $1 Trillion Market Value in Five Years, CEO Says

The Nigerian Stock Exchange Chief Executive Officer Oscar Onyema. Photographer: Andrey Rudakov/Bloomberg

http://www.bloomberg.com/news/2011-06-28/nigeria-s-bourse-targets-1-trillion-market-value-in-five-years-ceo-says.html
By Chris Kay and Oliver Joy

The Nigerian Stock Exchange Chief Executive Officer Oscar Onyema. Photographer: Andrey Rudakov/Bloomberg
.
The Nigerian Stock Exchange, whose index has tumbled 67 percent from its March 2008 peak, is targeting a market value of $1 trillion in five years as it attracts companies and plans to give shares to members through demutualization, Chief Executive Officer Oscar Onyema said.

“Our goal is to grow our market capitalization from $74 billion to $1 trillion in five years,” Onyema said in an interview in Moscow today. “If we can attract the oil and gas sector, if we can attract the telecoms sector and power sector then we should be able to hit those numbers.”

The bourse, whose index is sub-Saharan Africa’s third-worst performer over the past 12 months after Kenya and Botswana’s, is the second-biggest by market capitalization after South Africa’s, which has a value of $494 billion, according to data compiled by Bloomberg.

Nigerian President Goodluck Jonathan has asked the nation’s Securities and Exchange Commission to get oil exploration and telecommunications companies to trade their shares on the exchange, Arunma Oteh, the regulator’s head, said on Feb. 7.

Oil exploration, power and telecommunications companies aren’t represented on the bourse and “would be totally new areas for the exchange,” said Onyema. Agriculture is “another area where we will be making a push” as it’s underrepresented on the bourse and makes up 40 percent of the West African nation’s gross domestic product, he said.

“We really want them because we believe a well functioning capital market is a good barometer for the economy,” Onyema said. “So where these major sectors are not represented in our capital markets today we are not giving you an accurate picture of the economic potential of Nigeria.”

Demutualization Plan

The exchange of Africa’s top oil producer has no time frame for its plans to demutualize and a committee focusing on the process is scheduled to start next month, Onyema said.

“We want to do it right, we don’t want to do it in a rush,” he said. “We want to make sure we take into consideration all the stakeholders and we address all the key questions that need to be addressed as part of the demutualization process.”

Onyema, who started work in April, replaced Emmanuel Ikazoboh who was appointed in August as interim administrator after the Securities and Exchange Commission removed former head Ndi Okereke-Onyiuke, as part of measures to address “inadequate oversight of the exchange,” it said.

Onyema joined the Nigerian bourse from the American Stock Exchange, where he was a senior vice president and chief administrative officer.

To contact the reporters on this story: Chris Kay in London at ckay5@bloomberg.net; Oliver Joy in Moscow at ojoy@bloomberg.net

To contact the editor responsible for this story: Gavin Serkin at gserkin@bloomberg.net

Nigeria oil JV bill 'shelved'

http://www.upstreamonline.com/live/article264187.ece

An unwillingness from foreign players to cede any control of operations in the country to state-owned giant Nigerian National Petrol¬eum Corporation (NNPC) was behind the unconfirmed scrapping of the overhaul, Reuters reported.

The development of incorporated joint ventures (IJV) was intended to free up liquidity to push the West African nation’s oil industry forward.

“The IJVs are off the table for now," one executive at a foreign oil company, who asked not to be named, told the news wire.

"The oil majors don't think they would solve the funding problems and it would mean NNPC members became chairmen of the boards and they would want to manage operations that they (foreign oil majors) believe are better handled by themselves,” the source continued to Reuters.

Gold May Gain for First Time in Four Days Before Greek Vote on Budget Cuts

http://www.bloomberg.com/news/2011-06-28/gold-may-advance-for-first-time-in-four-days-ahead-of-greek-austerity-vote.html
By Sungwoo Park

Gold may gain for the first time in four days, snapping the worst run in more than a month, before a vote tomorrow by Greek lawmakers on budget cuts that rekindled concern over the region’s debt crisis. Silver rebounded.

Immediate-delivery bullion was little changed at $1,500.10 an ounce at 10:39 a.m. in Seoul after gaining as much as 0.4 percent to $1,503.32. The metal lost 3.3 percent in the past three days and touched a one-month low as concern over Greece eased and commodities including oil fell. The August-delivery contract rose 0.3 percent to $1,501.50 on the Comex in New York.

“The risk of European sovereign-debt crisis is still there,” said Park Jong Beom, a trader at Tong Yang Securities Inc. “The price won’t likely fall below $1,470.” The metal touched $1,490.85 yesterday, the lowest level since May 20.

Greek lawmakers vote on a five-year austerity plan that must back for the nation to secure more international aid. Failure to pass the plan may lead to the euro area’s first sovereign default. U.S. consumer spending unexpectedly stagnated in May as employment prospects dimmed and prices climbed.

Bullion has rallied 5.6 percent this year and is set for an 11th year of gains. The price reached a record $1,577.57 on May 2 as Greece’s debt crisis and record-low U.S. borrowing costs boosted demand for an alternative to currencies.

‘Monetary Easing’

“The expectation that U.S. monetary easing will continue for a while even after the termination of the quantitative easing is still in the background, providing another reason to support gold,” said Tong Yang’s Park.

Gold will be the best-performing asset for the rest of the year, UBS AG analyst Edel Tully said in a report yesterday, citing a survey of sovereign institutions. The desire to reduce holdings within 10 years has disappeared, she wrote.

Holdings in exchange-traded products backed by gold rose about 4.4 metric tons to 2,065.7 tons in the three to June 27, according to data compiled by Bloomberg from 10 providers.

Silver for immediate delivery, which touched the lowest level since May 17 yesterday after dropping for three days, advanced 0.6 percent to $33.7650 an ounce. The price has climbed about 9.2 percent this year.

Spot platinum advanced 1 percent to $1,690.25 an ounce, while cash palladium was little changed at $729.75 an ounce.

To contact the reporter on this story: Sungwoo Park in Seoul at spark47@bloomberg.net

To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net

Nigerian Military Takes Control of Maiduguri Following Blast

Nigerian Navy

http://www.blogger.com/post-create.g?blogID=6976744176799449928
Scott Stearns | Dakar, Senegal

Nigeria's military has taken control of security in the northern city of Maiduguri after bombs Sunday killed at least 25 people. Our correspondent reports on the militant group thought responsible for the attack.

A joint military task force of soldiers, navy, air force, police, immigration, and customs officers now controls Maiduguri after Sunday's bombing.

Task force commander Major General Okechukwu Nwaobo says at least seven gunmen on motorbikes bombed a beer garden in the Dala Kabompi neighborhood before escaping.

“This kind of attitude, this kind of unwarranted carnage, that is what we are here to stop," said Nwaobo. "We need the cooperation of each and every one of us, including the local populace. On our part, we will do what we can to win back the public confidence.”

The bombing is thought to be the work of the Islamic militant group Boko Haram, but no one has yet claimed responsibility. A Boko Haram spokesman did not respond to text messages asking about the attack.

The group has claimed responsibility for the bombing of national police headquarters in the capital Abuja earlier this month and the bombing of a beer garden in the city of Bauchi following last month's inauguration of President Goodluck Jonathan.

Boko Haram, whose name means “Western education is sinful,” has also been blamed for numerous attacks in Maiduguri targeting police, government officials, and religious leaders. The sect first came to public attention in 2009, when security forces killed hundreds of its members while putting down a violent uprising aimed at creating an Islamic state in northern Nigeria.

The group says it recognizes neither President Jonathan's election nor Nigeria's constitution. President Jonathan's administration has tried to open talks with the group. But Boko Haram says the threat of military force against it makes that impossible.

In an interview with Nigeria's Daily Trust newspaper before the Maiduguri attack, Boko Haram spokesman Abu Zaid said the federal government is asking his group to disarm while security forces have violated past agreements and are rearming. He quoted the Prophet Muhammad as saying, “A believer should not allow himself to be attacked twice in one place.”

The spokesman said the group is pursuing a sovereign land under Islamic law which might then engage in dialogue with what he called “the country of the unbelievers.” He said the group will continue to pursue past governors of northern states who called out forces against them.

International Court Issues Warrant for Gadhafi

Judges Sylvia Steiner, Sanji Mmasenono Monageng, and Cuno Tarfusser, back row, from left, are seen in the courtroom in The Hague, Netherlands. The International Criminal Court (ICC) has issued arrest warrants for Libyan leader Moammar Gadhafi, his son and his intelligence chief for crimes against humanity in the early days of their struggle to cling to power, Monday June 27, 2011

http://www.voanews.com/english/news/africa/International-Court-Issues-Warrant-for-Gadhafi--124589309.html

Judges at the International Criminal Court issued arrest warrants on Monday for Libyan leader Moammar Gadhafi and two of his most trusted lieutenants on war crimes charges.

Warrants issued for Gadhafi and others

The decision came after ICC Prosecutor Luis Moreno-Ocampo had asked for warrants for Gadhafi, his son Seif al-Islam and the head of Libyan intelligence, Abdullah al-Senussi.

Moreno-Ocampo says Gadhafi and his government carried out attacks against demonstrators, and ordered snipers to fire on civilians leaving mosques during the crackdown against rebels seeking Gadhafi's ouster.

Presiding judge Sanji Monageng said there are "reasonable grounds to believe" that the Libyan leader and his son are "criminally responsible" for the murder and persecution of civilians.

Gadhafi's government denies targeting civilians, instead accusing NATO of doing so during air strikes in support of Libyan rebels.

Meanwhile, witnesses in the Libyan capital, Tripoli, say they have heard two loud explosions and could see smoke rising from the area near Gadhafi's Bab al-Aziziya compound Monday.

Rebels claim advancement in battles

Rebels in Libya's western mountains said Sunday they have advanced and are battling government forces in a strategic town 80 kilometers southwest of Tripoli.

Opposition commanders said fighting on the outskirts of Bair al-Ghanam follows weeks of intense clashes in the Nafusa Mountains that have pushed government troops steadily back toward the capital.

The town is significant because it is only 30 kilometers from Zawiya, a key western gateway to Tripoli and home to a crucial oil refinery. Opposition forces seized Zawiya in March before pro-Gadhafi fighters retook the city.

Tunisia's state news agency said Monday three Libyan government ministers, including Foreign Minister Abdelati Obeidi, are holding talks with "several foreign parties" on the Tunisian island of Djerba. It did not give further details about the meetings.

Late Sunday, Gadhafi's spokesman remained defiant, insisting the Libyan leader "is leading the country. He will not leave. He will not step down."

Gadhafi has run Libya for 42 years, but is being pressured to cede power by rebels who rose up against his rule and by a NATO-led bombing campaign.

Chesapeake falls as energy stocks retreat. CEO rebuts N.Y. Times article posing questions about shale gas

http://www.marketwatch.com/story/chesapeake-falls-as-energy-stocks-retreat-2011-06-27

By Steve Gelsi, MarketWatch

NEW YORK (MarketWatch) — Energy stocks fell Monday, despite modest increases in the broad equities market, as Chesapeake Energy Corp. issued a rebuttal to a New York Times article that posed questions about shale gas production and reserve estimates.

The NYSE Arca Oil Index /quotes/zigman/1475596 XX:XOI +0.19% fell 0.1% to 1,227. The NYSE Arca Natural Gas Index /quotes/zigman/1468279 XX:XNG -0.23% dropped 0.5% to 645. The Philadelphia Oil Service Index /quotes/zigman/1470028 OSX +0.02% lost 0.4% to 248.

In energy futures, crude oil for August delivery /quotes/zigman/2075824 CL1Q -0.81% trended back toward $90 a barrel.

Click to Play Raw footage of New Mexico wildfireThe government closes its nuclear facility in Los Alamos and 100 residents are evacuated because of a fast-burning wildfire in New Mexico's Jemez Mountains.

Chesapeake Energy /quotes/zigman/126832/quotes/nls/chk CHK -0.39% shares fell 1.2%.

CEO Aubrey McClendon sought to rebut to a Times article entitled, “Insiders Sound an Alarm Amid Natural Gas Rush.”

It contained emails and comments from energy industry players and analysts who raised questions about whether natural gas is as easy and inexpensive to extract from shale as companies are saying.

In a statement issued late Sunday, McClendon said Chesapeake’s reserve accounting techniques are “strong and have stood the test of time for decades.”

It’s “ludicrous to allege that shale gas wells are underperforming as we sit awash in natural gas, with natural gas prices less than half of what they averaged in 2008,” McClendon said.

Also Monday, MDU Resources Group Inc. /quotes/zigman/237029/quotes/nls/mdu MDU +0.73% said it expects second-quarter earnings to come in a the low end of its forecast as a result of production disruptions in the face of bad weather in the U.S. The company continues to expect 2011 earnings of $1.05 to $1.30 a share.

However, management lowered its 2011 production forecasts because rain and flooding have hampered operations in the Rocky Mountain region, including the Bakken area, the Bismarck, N.D.-based company said.

“Like other producers, a number of wells were shut in at various times, and development efforts have been slowed,” the company said.

MDU now expects 1% to 5% oil production growth for this year, down from its earlier range of 5% to 10%. MDU also anticipates that natural gas production will fall 8% to 12%, wider than its earlier estimated drop of 4% to 8%.

MDU also said it paid an undisclosed price for 20,000 acres of leaseholds in the Bakken region of North Dakota.

Steve Gelsi is a reporter for MarketWatch in New York.

Oil Drops on Slowing Economies, Prospect of Another IEA Release

http://www.businessweek.com/news/2011-06-27/oil-drops-on-slowing-economies-prospect-of-another-iea-release.html

By Margot Habiby

(Bloomberg) -- Oil fell amid concern that economic expansion in the U.S. and China is slowing and after the International Energy Agency said it’s prepared to release additional crude from stockpiles.

Crude dropped as much as 1.5 percent in New York and Brent decreased as much as 2.7 percent in London after a U.S. report showed consumer spending stagnated last month and a Chinese preliminary purchasing managers’ index indicated factory output may rise at the slowest pace in 11 months in June. The IEA said it will decide in 30 days whether to tap additional stockpiles.

“The market’s been struggling because of economic concerns both in the U.S. and globally,” said Tom Bentz, a broker with BNP Paribas Commodity Futures Inc in New York. “When these strategic reserves come to the market, they’re going to compete directly with Brent crude, which is the market that led us up and is leading us back down again.”

Crude for August delivery fell $1.07, or 1.2 percent, to $90.09 a barrel at 9:19 a.m. on the New York Mercantile Exchange. Earlier, futures touched $89.82 a barrel. Futures have tumbled 16 percent so far in the second quarter.

Brent oil for August delivery decreased $1.03, or 1 percent, to $104.09 a barrel on the ICE Futures Europe exchange in London after touching $102.28.

The IEA, which announced June 23 that members would jointly tap strategic reserve for the third time in the organization’s history, will act again if needed, Nobuo Tanaka, the agency’s executive director, said on June 25.

IEA Action

“If necessary we’ll continue,” he said in Beijing. Previous releases responded to the first Persian Gulf War in 1991 and Hurricane Katrina in 2005.

New York futures dropped the most in six weeks on June 23, dipping below $90 a barrel for the first time since February. The U.S. will provide 30 million barrels of the IEA release, European members will contribute about 20 million and Asian nations about 10 million barrels.

In Europe, Greek lawmakers will vote on a five-year austerity plan. Failure to pass the plan may lead to the euro area’s first sovereign default.

“The market dropped below $90 once again on fears about the economy and the Greek issues,” said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut. “Just below $90 is pretty strong support, so it’s trying to hold last week’s lows.”

--With assistance from Rachel Graham in London and Robert Tuttle in Doha. Editors: Dan Stets, Richard Stubbe

To contact the reporter on this story: Margot Habiby in Dallas at mhabiby@bloomberg.net.

To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net.

Nigeria: Bomb Attacks In Northeast Borno State Kill At Least 25, Police Blame Boko Haram

http://www.huffingtonpost.com/2011/06/26/nigeria-bomb-attacks-northeast-borno_n_884810.html

By NJABVARA MUSA

MAIDUGURI, Nigeria -- Suspected members of an Islamic sect bombed three beer gardens in northeastern Nigeria, killing 25 people and wounding 12 others on Sunday, authorities said.

Police blamed the attack on a group known locally as Boko Haram, which earlier this month carried out an attack on the nations police headquarters.

Authorities said two men riding on a back of motorcycles threw bombs at beer gardens, which are popular nightspots for locals.

Boko Haram, whose name in the local Hausa language means "Western education is sacrilege," has claimed responsibility for a series of attacks in northeast Nigeria. Most attacks have occurred in the Boko Haram stronghold of Maiduguri, which is about 540 miles (872 kilometers) from Nigeria's capital, Abuja.

The group recently claimed responsibility for an attack that killed at least 22 people at the police headquarters in Abuja.

Northeast Borno state, where the Sunday blast happened, is one of a dozen states that have embraced Islamic Shariah law. However, outdoor beer gardens hidden from public view remain popular nightspots.

Venezuela's Chavez in 'critical' condition: report

http://news.yahoo.com/s/afp/venezuelapoliticscubachavez

MIAMI (AFP) – Venezuela's President Hugo Chavez, who is in Cuba following emergency surgery, is in "critical" but stable condition, Miami's El Nuevo Herald reported Saturday, citing US intelligence sources.

Chavez's government has said he was operated on for a pelvic abscess June 10 and is recovering well; the president's brother has told Venezuelan state media that Chavez could return to Caracas in about two weeks.

But the Venezuelan government has not addressed details of Chavez's condition. And opposition lawmakers are up in arms in Caracas as many think it is unconstitutional for the president to be governing from abroad.

The Spanish-language El Nuevo Herald cited unnamed US intelligence sources as refusing to comment on rumors in Venezuela that Chavez could be receiving treatment for prostate cancer.

Yet one source was quoted as saying that Chavez "is in critical condition; not on the brink of death, but critical indeed, and complicated."

The same sources said Chavez's daughter, Rosines, and his mother, Marisabel Rodriguez, were recently whisked off to Cuba in an air force plane, the report said.

"They took Marisabel and her daughter out urgently," another source told the paper. "That was 72 hours ago."

After almost two weeks of uncharacteristic quiet, Chavez took to Twitter again on Friday, without addressing the controversy over his time spent abroad recovering from surgery in Cuba.

"Good morning to my (Twitter followers). It is my Army's Day, and the sun is shining brightly. I am sending a big hug to my troops and my beloved people," Chavez (@chavezcandanga) tweeted on the microblogging service.

The firebrand leftist leader was hospitalized June 10 in Havana, his top regional ally, for what officials said was an operation for a pelvic abscess, but turned into an uncharacteristically quiet and prolonged absence.

Officials in Caracas have insisted that Chavez, 56, is recovering well and continuing to give orders from Cuba, and keeping abreast of developments in Venezuela.

And relatively few words from someone known for his verbal omnipresence left some foes speculating he might have had plastic surgery or might want to drum up sympathy for his illness ahead of a 2012 election in which he will seek a third term.

Chavez arrived in Cuba on June 8 on the final leg of a trip authorized by the National Assembly that also included Brazil and Ecuador. He was rushed into emergency surgery after suffering sharp pain diagnosed as a pelvic abscess that required immediate surgery.

Opposition legislators, who control 40 percent of Venezuela's single-chamber legislature, argue that his prolonged absence means that Vice President Elias Jaua should replace him.

Chavez is Communist Cuba's main economic and political ally. His cut-rate oil keeps the cash-strapped and isolated Raul Castro regime afloat.

CFTC Eyes Trades Ahead of IEA News

http://www.thestreet.com/story/11165547/1/cftc-eyes-trades-ahead-of-iea-news.html?cm_ven=GOOGLEN
NEW YORK (TheStreet) -- The Commodity Futures Trading Commission is reviewing suspicious trading in oil futures that preceded Thursday's news that countries around the world were releasing stockpiles of crude oil, according to a published media report.

The report, posted on The Wall Street Journal's Web site Saturday, cited one person familiar with the CFTC's actions.

Oil prices fell in the hours before the International Energy Agency announced that 60 million barrels of crude would be released from strategic stockpiles.

This indicates that some traders could have learned of the decision ahead of time, the report said, citing the source. It could also be that someone leaked the IEA's decision. The agency must coordinate with its 28 member nations before making major decisions, meaning many people may have been privy to the information before it was announced, the report noted.

The CFTC declined to comment, and the IEA couldn't be reached for comment, the report said.

Using leaked data to trade isn't illegal in commodity markets, the report noted.

Tracking down who may have profited from having advance information could be difficult, as the CFTC would have to consult with foreign regulators on any traders located outside the U.S., the report said.

Lakshmi Mittal sued by former friend over Nigerian oil deal

http://www.guardian.co.uk/business/2011/jun/23/businessman-sues-lakshmi-mittal-oil-deal
Moni Varma claims Mittal reneged after promising to pay him for deal to gain access to Niger Delta oil fields

By Rajeev Syal

Lakshmi Mittal has been issued with a high court writ. Photograph: Johannes Eisele/EPA

Britain's richest man is being sued for allegedly reneging on a multi-million dollar agreement to pay fees to a former friend for helping to secure an oil deal with a former Nigerian president.

Lakshmi Mittal, the steel tycoon who is one of Labour's most generous donors, has received a high court writ from the businessman Moni Varma.

Varma claims to have facilitated a deal in 2006 for Mittal to gain access to two unexplored oil fields in the Niger Delta after arranging a meeting with Olusegun Obasanjo, who was Nigeria's president.

Mittal has dismissed the claim, saying the case will be defended vigorously.

The case offers a rare glimpse into the business empire of Mittal, reportedly the world's sixth-richest man. It has also created ructions within the community of London's super-rich Indians in which both men once socialised.

Varma, 62, from Northwood, Middlesex, whose company Veetee Rice is one of Britain's biggest rice traders, said he had been let down by Mittal. "I am saddened but I have been left with no choice but to issue court proceedings against Lakshmi to recover sums that are due to me," he said.

Mittal, 61, whose wealth is estimated to be £17.5bn in this year's Rich List, has offered to pay $5m (£3.1m) but this has been rejected.

Since moving to Britain with his family in 1995, the "Steel Maharajah" – as Mittal is called – has become well known for his expensive tastes and his involvement in British public life. He has donated more than £5m to Labour and has imported marble from the quarry that was used for the Taj Mahal to decorate his £60m home.

The ArcelorMittal Orbit – 1,500 tonnes of steel twisted into a sculpture by the artist Anish Kapoor – will be Britain's largest piece of public art and will dominate the skyline at the Olympic Park in Stratford, east London.

But his success in business, and his ability to move seamlessly into unexplored industries, has remained a mystery.

The writ details how Varma and Mittal have known each other socially since 1997 and regularly discussed business opportunities at glittering social events in London.

Varma, who was born in India but educated in Malawi, has longstanding connections with Nigeria and had known Obasanjo since 2001 because he had exported rice to the African state, the documents claim.

In July 2005 Mittal Investments Sarl, a company owned by the defendant, launched a joint adventure with OVL, a subsidiary of ONGC India, India's leading oil and gas exploration company.

A month later Mittal and Varma met for dinner at Amaya, an Indian restaurant in Knightsbridge, and discussed possible deals in Nigeria, the writ claims. In September 2005, Varma claims, they held a conversation that is at the heart of the case. They discussed how much Varma would be paid if the deal came through, the writ claims. Varma claims Mittal said he could expect between 5% and 15% of the defendant's investment.

According to the writ Mittal responded "I will cover you" or "you will be covered ... The reward could be even bigger than 15%, depending on the size of the deal."

Varma claims that over the following six months he was cut out of the deal and could only watch as it was completed.

Mittal's joint venture with the Indian government was successful in its bids for two licences for 10 years in downstream projects in Nigeria. The anticipated combined yield of the "blocks", or areas of oil, was 650,000 barrels a day and the value of the downstream projects is $6bn.

Varma claims he continued to try to contact Mittal about the deal and when he could expect payback.

In March he managed to speak to Mittal, who offered $5m, the writ claims, but the offer was rejected. According to the writ, this offer was then denied in a subsequent letter from Mittal's solicitors Schillings, but Mittal has since said that he did discuss a possible payment of $5m, depending on the success of the projects.

Mittal's lawyers are expected to argue that Varma was a social acquaintance of their client, and that Varma offered to arrange a meeting with Obasanjo.

They also point out that neither block has yet produced any oil and that the costs have so far been $325m. The lawyers have also dismissed as fanciful Varma's claims of introducing Mittal to Nigeria.

A spokesman for Mittal's legal team said: "We are aware of the case, in relation to which we believe there are no grounds and which we intend to defend vigorously."

Obasanjo, who stepped down as president in 2007, has been accused in Nigeria of overseeing a series of poorly negotiated oil deals. A report by Chatham House two years ago criticised oil deals brokered by his government with Asian countries, claiming that they were short-termist and exploitative.

Mittal has previously been at the centre of political controversy. In May 2001 he gave £125,000 to the Labour party, shortly after which Tony Blair backed his bid for a Romanian firm, sparking the 2002 Steelgate row.

Analysis: West African oil seen distressed by IEA stocks

http://www.reuters.com/article/2011/06/24/us-crude-flow-idUSTRE75N3OM20110624
By Ikuko Kurahone

LONDON

(Reuters) - Oil trade from African nations Angola and Nigeria may suffer most from the global oil stocks release as U.S. refiners will opt to cut imports and Asian buyers will bargain hard amid abundant offers from the Gulf.

The International Energy Agency (IEA), announced on Thursday a release of up to 60 million barrels of oil to the market from mandatory emergency stocks.

Half the volume will come from the United States, the world's top consumer and it will be consumed domestically. The Department of Energy offered 30 million barrels, equivalent to 15 very large crude carriers (VLCCs), of light-sweet crude from the Strategic Petroleum Reserve.

"The 15 VLCCs will be released in the coastal areas in the United States. This will alleviate the need to import West African crude," a London-based trader with an investment bank said. "This is a direct consequence of the IEA release."

West African producers, mostly Nigeria and Angola, are key suppliers of light sweet crude to the United States apart from its domestic production such as Louisiana Light Sweet (LLS).

"If U.S. guys can buy light-sweet from the SPR a lot more cheaply than Nigerian barrels on the spot market, they will opt for the SPR," a physical crude trader with a U.S. major said.

Another trader estimated exports of West African oil to the United States would total about 1.38 million barrels per day (bpd) in June and 1.25 million barrels in July. Physical West African crude trades 40-45 days ahead.

Oliver Jakob with Petromatrix said some cargoes may be diverted from the U.S. Gulf.

"Given the limited amount of storage capacity currently in the U.S. Gulf and in the Midwest it is likely that some import barrels will have to be re-directed to Europe and the Far East, especially crude oil of West African origin," he said.

Europe and OECD Asia Pacific will account for 30 percent and 20 percent of the 60 million barrel release, respectively. But the breakdowns for crude and oil products are not yet clear.

FLOATING STORAGE

The slowdown of West African flows is likely to depress the tanker market in the short term but in the mid-term could become positive news, said Douglas Mavrinac, analyst with securities and investment bank Jefferies.

"We believe the move could actually have positive implications over the next 3-6 months -- including an increase in floating storage with the potential re-emergence of contango in the Brent crude oil strip due to the decrease in the front month oil price," he said.

Mavrinac also said that demand for oil would increase in reaction to the fall in prices, and that Saudi Arabia may increase output in an attempt to protect its market share.

Other traders said China and India might snap up light sweet crude from West Africa and Caspian producers to benefit from a fall in benchmark North Sea Brent price versus Middle East Dubai crude.

"More IEA crude could soften the Brent-Dubai spread making West Africa or east bound cargoes more workable," a tanker market source said.

The Brent/Dubai exchange for swaps (EFS) for August tumbled to $4.30 a barrel, down $1.80 from Thursday, Reuters data showed. A narrower EFS spread opens up the West-to-East crude oil arbitrage.

FULL VOLUME?

Roy Jordan, analyst with Facts Global Energy, said refineries in the United States, southern Europe, Japan and South Korea would take some barrels to be released by the IEA. But there may not be enough takers.

"I do not expect that the full volume will be taken up," Jordan said.

"The IEA itself is uncertain whether the full 60 million barrels will be taken up and will review the situation when the position is clearer."

In the two previous releases at the wake of Hurricane Katrina in 2005 and the Gulf War in 1991, the volumes of the actually released oils were below the announced volume.

The IEA did not provide the actual volumes.

Even though Jordan forecast not all the volume would be released, the release would lead to some increases in U.S. demand to replenish the SPR over the split periods of time.

"This may open up the arbitrage again," a trader of West African crude said. "The impact of the IEA barrels may be limited to the near 1-2 months."

(Writing by Ikuko Kurahone, reporting by Simon Falush, Zaida Espana, Jonathan Saul and Dmitry Zhdannikov)