With the world’s demand for oil and gas surging, multinational energy giants have embarked on a platform-building spree off the southern coast of Nigeria with an eye to doubling exports from the unruly West African giant.
From the deck of Total’s Amenam platform, high above the surging blue waters of the Atlantic, visitors can see the bright orange gas flares of a half-dozen more wells through the haze in the middle distance.
In the foreground lie the half-built structures of future oil and gas rigs.
Nigeria--which last year produced an average of more than 2,5-million barrels per day despite chronic insecurity in its oil-rich regions--has embarked on an ambitious period of expansion designed to increase its daily exports to 4,1-million barrels and beyond within the next few years, mg.co.za said.
At the same time, massive investment is being poured into building liquefied natural gas plants to convert the gas, which is wastefully and damagingly burned off above the wells, into a saleable and clean-burning fuel for the world’s rapidly expanding market of gas-fuelled power stations.
The bulk of the extra production is expected to come from offshore fields, some on the continental shelf in waters off the coast of the Niger Delta and some in deeper and so far vastly underexploited fields under the once-inaccessible floor of the Atlantic Ocean.
French Trade Minister Francois Loos, who visited the Niger Delta last week, said Nigeria’s expansion will be a key factor in meeting the challenge of rising prices and rising consumption, particularly in the surging Chinese economy, which relies on oil imports.
“Demand will increase by two million barrels per day every year. You have to produce them somewhere,“ he told Nigerian industrialists and academics at a working breakfast in the oil city of Port Harcourt before his visit to the Amenam rig, the hub of Total’s current offshore expansion.
The minister was briefed on expansion plans during a tour of the facility--a cluster of drilling rigs and production platforms linked by undersea pipes to a massive floating storage and offloading vessel, which can hold two million barrels of crude, 55km offshore.

Massive Investment
Total is currently a relatively small player in Nigeria’s oil sector, exporting about 220 000 barrels per day, but by 2010 it “will double and probably more than double that“ thanks to a $1,2-billion investment over the next three years, said Total’s regional manager, Thierry Bourgeois.
A parallel to the French group’s activities, the Anglo-Dutch giant Shell, Italy’s Agip and the United States majors ChevronTexaco and ExxonMobil are also racing into new offshore territory. Shell alone has promised to invest $8,2-billion in new production between 1999 and the end of the year.
Shell’s Bonga field, which is due to come online by the end of the year, is thought to hold 1,2-billion barrels of crude, while Chevron has begun work on the Agbami field, which holds one billion barrels.
Nigeria’s presidential oil adviser Edmond Daukoru predicts new finds totaling two to three billion barrels of oil every year until 2010. This year, he will auction off 60 more oil-exploration blocks both offshore and in previously unexploited areas of the Nigerian mainland.
The attractions of Nigerian oil are easy to see. It is largely sweet, light, low-sulphur crude--which is easy to convert into petrol--and lies near the shipping lanes to the fuel-hungry US and Brazil’s emerging market.
But the industry has been plagued by Nigeria’s unstable political scene.
Onshore wells in the swamps of the Niger Delta are often targeted by pirates and ethnic militants.
Total shut down its operations in the block known as Oil Mining License 57 in the western delta swamps near Warri on March 15 2003 after its tank farm there was destroyed in an attack that left five people dead. About 10 000 barrels per day in production have been lost.
ChevronTexaco’s nearby wells have also been shut since March 2003 following the same ethnic violence. Several tens of millions of barrels in estimated reserves have lain untapped under Ogoniland since Shell quit the area following the controversial execution of minority rights activist Ken Saro-Wiwa in 1995.

Ethanol will stretch the nationÕs fuel supply and make gasoline burn more cleanly.

Half of the automotive fuel in the United States could be replaced with ethanol from renewable agricultural crops and forest wastes and energy crops, says a University of Florida researcher who has developed a biotechnology “bug“ that converts biomass and other farm wastes into fuel.
“We can reduce our dependence on imported oil and lower the price of automotive fuel by reformulating our gasoline with ethanol derived from inexpensive farm wastes,“ said Lonnie Ingram, a professor of microbiology with UF’s Institute of Food and Agricultural Sciences.
His breakthrough technology--a genetically engineered E. coli bacteria--produces fuel ethanol from farm wastes such as corn stems, cobs and leaves. A related technology can be used to produce biodegradable plastics from biomass,allamericacanpatriots.com said.
“With the cost of imported oil reaching record highs, we can use this new technology to produce ethanol for about $1.30 a gallon,“ he said. “Ethanol will stretch the nation’s fuel supply and make gasoline burn more cleanly. Gasoline-ethanol blends also boost the octane rating of automotive fuel.“
Ingram, who was invited to present a briefing about the technology to the staff and members of Congress in April, says his genetically engineered E. coli bacteria is capable of converting all sugar types found in plant cell walls into fuel ethanol. Ingram’s organism produces a high yield of ethanol from biomass such as sugarcane residues, rice hulls, forestry and wood wastes and other organic materials.
The bioconversion technology, selected by the US Department of Commerce to become Landmark Patent No. 5,000,000, is being commercialized with assistance from the US Department of Energy (DOE). BC International Corp., based in Dedham, Mass., holds exclusive rights to use and license the UF-engineered bacteria.
Until now, all of the world’s fuel ethanol has been produced from high-value materials such as cornstarch and cane syrup using yeast fermentations. In 2005, more than 4.5 billion gallons of fuel ethanol will be manufactured from cornstarch and used as automotive fuel.
He said his technology will further expand ethanol production by converting celluloic waste into fuel ethanol, more than doubling current ethanol production.
Ingram, who is director of the Florida Center for Renewable Chemicals and Fuels at UF, cited a recent report from the US Department of Agriculture and DOE that indicates more than one billion tons of biomass can be produced on a sustainable basis each year. Converting this to fuel ethanol could replace half of all imported petroleum in the United States.
A member of the National Academy of Sciences, Ingram said he genetically engineered the E. coli organisms by cloning the unique genes needed to direct the digestion of sugars into ethanol, the same pathway found in yeast and higher plants.
These genes were inserted into a variety of bacteria that have the ability to use all sugars found in plant material, but normally produce a worthless mixture of acetic and lactic acids as fermentation products. With the ethanol genes, the engineered bacteria produce ethanol from biomass sugars with 90 to 95 percent efficiency.
“Until we developed this new technology, the chemical makeup of biomass prevented it from being used to make ethanol economically,“ Ingram said. “Biomass is a much cheaper source of ethanol than traditional feedstocks such as cornstarch and cane syrup, but the cost of processing is higher.“
Greg Luli, vice president of research for BC International’s laboratory at the Sid Martin Biotechnology Center in Alachua, Fla., said the firm plans to build a 30- million-gallon biomass- to-ethanol plant in Jennings, La. The plant’s technology and process will be based upon Ingram’s genetically engineered bacteria.
“The facility, expected to be operational by the end of 2006, will convert organic waste into ethanol, a form of alcohol that can be used as an industrial chemical and as a clean-burning fuel,“ Luli said. “Waste from the sugarcane industry in Louisiana will serve as the plant’s main feedstock.“

Russia's total production of natural gas in 2004 was 591 billion cubic meters, which is 1.6 percent more than the year before.

Oil and gas condensate production grew 3.4 percent in the January to April period of 2005 and hit 152m tons, the Russian Federal Statistics Service (Rosstat) has reported. Oil production shrank at a 3.4-percent monthly rate in April and advanced 3 percent from a year earlier. In 2004, oil and gas condensate production rose 8.9 percent to 458.808m tons.
Production of natural gas in January-April 2005 in Russia totaled 225 billion cubic meters, 1.3 percent more than in the same period last year, the federal state statistics service reported. In April 2005, Russia’s natural gas output was 0.3 percent up on the same period last year, but it was 6.6 percent lower than in the previous month.
Russia’s total production of natural gas in 2004 was 591 billion cubic meters, which is 1.6 percent more than the year before. Of this amount, Gazprom produced 545.1 billion cubic meters, russiajournal.com said.
The industrial output index reached 104.2 percent in Russia in January-April, 2005, compared to January-April, 2004, the federal state statistics service has reported. In April 2005, industrial production grew 5 percent against that in April 2004, but it dropped 3.6 percent against that in March 2005.
In January-April, 2004, industrial output increased 6.9 percent against that in January-April, 2003, and in April 2004, it fell 4.6 percent against that in March 2004. In total, industrial output grew 7.3 percent in 2004.
Russia’s investments accumulated abroad amounted to USD7.566 billion by the end of March, 2005. Russia allocated USD6.4 billion in investments abroad in the first quarter of this year, up 53.4 percent from a year earlier, the Russian Federal Statistics Service (Rosstat) has reported. Redeemed investments totaled USD6.3 billion, up 55.3 percent from a year earlier.
Russia transferred USD1.25 billion in investments in the South Africa (16.5 percent of the overall amount). Investments in Netherlands were USD625m (8.3 percent).

Cypress Semiconductors plans to install what will be the Bay Area’s only fuel cell power generator at its San Jose campus this fall. However, these electricity-producing machines may soon become more common in the Bay Area.
The 5-kilowatt power plant--enough electricity to power a residential duplex--is being produced by Ion America Corp., located at Moffett Field.
The Cypress installation will be a demonstration project for investors and potential customers alike to see the feasibility of the product, says Kevin Kassekert, Cypress’ facility manager. Cypress is a minority investor in Ion America.
“This will be the fruits of a 50-year (industry) goal to develop cheap, clean energy source,“ says Pashu Gopalan, vice president of sales and marketing for Ion America Corp. “We’re not there yet, but we think we are very close. If we make it, it is the holy grail of energy.“
A fuel cell is an electrochemical energy conversion device, similar to a battery. It provides continuous DC power, which converts the chemical energy from hydrogen directly into electricity and heat. When only hydrogen is used, its only exhaust is water. Power generators using fuel cell technology can use natural gas, propane and any other hydrogen-containing fuel. These machines do produce some exhaust when the hydrogen atoms are separated from their source energy, but the process is still 60 percent cleaner than a natural gas-fired power plant of similar size, bizjournals.com said.
Fuel cell technology in automobiles has been touted as the solution to the United States dependence on foreign oil. But that use is at least 10-to-15 years away because of the high costs of safely converting hydrogen into fuel in the confined space of an automobile.
In contrast, the commercial viability of using fuel cells to produce power that can be transferred to the grid or directly to a home or business is close, says John Quealy, an equity research analyst with the Winslow Management Co.
“Today’s high electricity cost makes this more palatable,“ Mr. Quealy says. The average cost is about 8 cents a kilowatt, roughly equal to what most large Silicon Valley companies are paying for electricity today.
Other companies have either signed deals or are in discussions to bring fuel cell power generators to their business. Pacific Gas & Electric Co. offers rebates for fuel cell power generators under the state’s renewable energy program.
The San Francisco Sheraton is in final discussions with Massachusetts-based FuelCell Energy Inc. to install a 50 kilowatt fuel cell power plant in its hotel by 2006, says FuelCell spokesman Joseph Heinzmann. The Alameda County jail in Dublin is scheduled to install a FuelCell Energy, 1-megawatt fuel cell plant at its facilities in early 2006. Southern California Edison is also requesting bids for fuel cell peaker plants to provide power during peak-energy times in 2006.
Smaller companies like Ion America, PlugPower Inc. and Kingston, Ontario-based Fuel Cell Technologies Ltd. are going after the residential market with generators as small as 2.5 kilowatts.
“It would supplement furnaces as a heating and electricity source, using natural gas as a source fuel,“ says Vikram Varma, director of corporate development for Fuel Cell Technologies. “We are now at the size of a large refrigerator. Eventually, it will be the size of a water heater.“
The problem with fuel cell power generators is that they run hot-- up to 800 degrees Celsius--and the durability of the fuel cells have not been proven.
Silicon Valley Power, the city of Santa Clara’s public utility, ran a 2-megawatt fuel cell power plant for a few months in 1995 in a test coordinated with NASA’s Jet Propulsion Laboratory to demonstrate the feasibility of fuel cell research.
“It still takes too much monitoring, too much down time to replace parts,“ says Harvey Frank, the semi-retired senior manager of power technology for the Jet Propulsion Laboratory. “More work still needs to be done to reduce the costs, to develop better catalysts to drive the machines ... basically make them smaller and easier to use.“
Ion America would not discuss the details of its project or its future goals, but Mr. Gopalan says his company is well funded and poised to take advantage of a growing market.

Chile said it will consider using nuclear power as it seeks new energy sources after a natural gas shortage and record oil prices this year.
Chilean President Ricardo Lagos said the decision to use nuclear power would be left to the next administration. Lagos, who steps down in March, made the comments in a speech to the nation’s Congress today in Valparaiso.
``We need to think about nuclear energy, yes, nuclear energy,’’ Lagos said. A government committee will ``study all the possibilities, advantages and disadvantages, costs and benefits, risks and uncertainties that the use of new forms of energy in Chile can mean.’’
Chile has no nuclear power plants now. Argentina has reduced its exports of natural gas to Chile to ease a shortage in its own market. The shortfall has led to slower production at factories and increased electricity prices as generators switch to more expensive fuels. A surge in oil prices also has boosted costs in Chile, which depends on oil imports.
Lagos also said that the government will subsidize the cost of fuel when oil prices rise above $55 a barrel using funds from state-run oil company Empresa Nacional de Petroleo and from insurance purchased by the government. The government also will give subsidies to poor families to pay for higher electricity prices, according to bloomberg.com.
Crude oil for June delivery fell 12 cents, or 0.3 percent, to close at $46.80 a barrel on the New York Mercantile Exchange yesterday.
Chile is one of the most seismically active countries in the world. In 1960, the country had the largest-ever earthquake by magnitude, while the ninth-largest quake by magnitude was on the border of Chile and Argentina in 1922, according to the Web site of the US Geological Survey.
Japan, which had one of the world’s most deadly quakes in 1923 and also is dependent on imports of fuel for much of its power, generated about 14 percent of its electricity from nuclear plants in 2002, according to the US Energy Information Administration’s Web site.