LAGOS, Nigeria ? A major union threatened Thursday to stop the beating heart of Nigeria's economy ? crude oil production ? as part of a nationwide strike and protests gripping Africa's most populous nation.
World oil prices climbed on the news. Nigeria is the fifth-largest oil exporter to the U.S., and a shutdown would force American refineries to replace 630,000 barrels per day of crude.
The union's ability to enforce a shutdown, beginning Sunday, across the swamps of Nigeria's southern delta to its massive offshore oil fields, remains in question. But the threat of a strike caused jitters on global oil markets as traders worldwide worried about supply.
Nigeria has been paralyzed by a strike that began Monday after President Goodluck Jonathan's government abandoned subsidies that kept gasoline prices low. Overnight, prices at the pump more than doubled, from $1.70 per gallon (45 cents per liter) to at least $3.50 per gallon (94 cents per liter). The costs of food and transportation also doubled in a nation where most people live on less than $2 a day.
Anger over losing one of the few benefits average Nigerians see from being an oil-rich country, as well as disgust over government corruption, have led to demonstrations across this nation of 160 million people and violence that has killed at least 10 people.
The Petroleum and Natural Gas Senior Staff Association of Nigeria, which represents about 20,000 workers, said it would be forced to "apply the bitter option" of closing down all oil and gas production if the government refused to reinstate the gasoline subsidies.
Union president Babatunde Ogun said if fields are shut down, it could take six months to a year to restart them.
"We ... believe that if everything comes to a standstill, the government will budge," Ogun told reporters in Lagos. Petrol dollars dominate Nigeria's economy and represent the majority of its government revenues.
Ogun also said a natural gas shutdown would turn off the nation's power grid, which is already in shambles.
Negotiations between labor and the government ended Thursday night without any announcement. Officials said they would resume Saturday.
So far, Nigeria's oil industry hasn't felt the effects of the national strike. Many of its operations are automated, both for efficiency and to avoid having staff work in the Niger Delta's maze of creeks, where criminal gangs and militants target workers for high-dollar kidnappings.
Foreign companies also run large offshore fields, far from the chaos of growing demonstrations across the country. Shipments from offshore platforms move immediately to market.
But if something breaks, if the pressure in the wells fluctuate, or if countless other problems occur that cause an automatic system shutdown, there wouldn't be anyone there to get production running again.
When pressed about how the threatened shutdown could affect the automated parts of the industry, Ogun did not offer an answer.
Most oil firms, including the dominant Royal Dutch Shell PLC, say they are monitoring the situation.
Kenneth Arnold, an independent petroleum consultant and former Shell engineer, said it "would be very easy to shut down" Nigeria's oil fields. Bringing in replacement workers to run the fields raises dangers, he said.
"It may not be safe to stay there," Arnold said. "In Nigeria, people get killed in the oil fields. There are local bad guys who want a share of the action."
Other companies with subsidiaries in Nigeria include Chevron Corp., Exxon Mobil Corp., Italy's Eni SpA and French firm Total SA, which operate in tandem with the state-run Nigerian National Petroleum Corp.
Levi Ajuonoma, a spokesman for the state-run oil firm, said it had not adjusted its production and shipping forecasts over the strike. It will take time for Nigeria's government coffers to feel the impact of the lost revenue, as oil and natural gas cargoes go out months ahead. That means, at least in the short term, supply to the U.S. would not be affected.
However, a shutdown could impact futures oil prices on global stock markets ? potentially raising the cost of gasoline for U.S. consumers. Global oil prices rose when militants began several years of attacks on oil companies and crude oil pipelines in 2006.
Oil prices were up much of the day Thursday over concerns about the impact of a Nigerian shutdown on global supplies, with benchmark crude rising by as much as $1.38 to $102.25 per barrel in New York. Prices retreated later in the day on rumors that Europe would delay an embargo of Iranian oil, to end the day down at $99.10.
"As long as Nigeria's government is selling crude ... the impact to them will not be that significant," University of Ibadan economics professor Adeola Adenikinju said. "The fiscal nerve center of the economy has not really been touched."
The growing protests and attacks from a radical Islamist sect have also put additional pressure on a government already facing popular dissent following the removal of the fuel subsidies. Analysts warn that could raise political risks in a nation with a young democracy and a history of military rulers.
"The subsidy issue provokes such strong emotions because it is viewed as one of the few benefits that Nigerians receive from living in an oil-producing nation," Barclays Capital said. "If the protests continue or gain momentum, they will pose a major challenge to the Jonathan government and potentially exhaust the capacity of an administration already facing a sustained security threat."
___
AP Energy Writer Chris Kahn in New York contributed to this report.
___
Jon Gambrell can be reached at http://www.twitter.com/jongambrellAP.
tracy mcgrady mash alec baldwin kicked off plane alec baldwin kicked off plane mumia mumia uss arizona memorial
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.