Instability in Nigeria = Higher Oil Prices
If I learned anything from actually listening to what Bin Laden had to say instead of forming an opinion based on quantified in the national media, it was that the United States can't expect and maintain national security and dominance off the sweat and blood of other countries and expect that there will be no backlash and no repercussions. But back to peak oil...(or were we already there?). Nigeria is yet another example of how unstable oil markets are. A small disagreement between a village and Royal Dutch Shell over an oil spill has significantly contributed to the rise in world oil prices. Imagine what a would a major event would do to world oil markets...
The dispute grew out of a disagreement over which contractor should clean up the oil spill. In the wake of the accident, the village council appointed a contractor to do the job. Shell appointed another, and when he arrived, villagers chased him away.
The reason: The village-appointed firm had agreed to do such things as fixing the village's defunct water wells and providing plastic chairs for residents sit on. Then, villagers say, the Shell-appointed man came late one night with a bevy of drunken soldiers - and Shell's approval - and ransacked the village, leaving one teenager hospitalized and four houses and two cars destroyed. Shell, in a statement, denies inviting "any security agents into the community" and says the villagers have impeded cleanup....
Four international oil workers were taken hostage by armed men in speedboat last week... On Monday, one of the four hostages read a list of the captors' demands, including local control of oil wealth, a $1.5 billion payment by Shell to compensate for pollution, and the release from jail of an oil-region militia leader.
"Is this road fitting for an oil-producing community?" asks indignant village chairman Mr. Oweh, pointing to the bumpy dirt track that is his village's main street.
"The loss of more Nigerian oil could send the price to $80 or $95 per barrel or higher," says David Goldwyn, a former US assistant energy secretary who now consults in the region.
Nigeria's production has dropped by nearly 10 percent. Given the instability here, he says, "The likelihood of a significant disruption" to Nigeria's output of about 2.6 million barrels per day "always has to be counted as relatively high."
Already, two attacks in recent days on some of Shell's roughly 1,000 oil wells and 80 pumping stations caused a drop of 220,000 barrels a day in output - nearly 10 percent of Nigeria's 2.5 million barrels a day in exports.
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