Oil

It was reported last week that attacks on and kidnappings of aid workers in Chad have caused six aid organizations, including the International Committee of the Red Cross, to suspend operations there. Undeterred, this morning the top U.N. official in Chad announced "positive signs on the horizon," predicting increased peace and stabilization in the country.

This isn't the first time violence has driven away aid groups: in May, 2008, the head of the Eastern Chad mission of British aid organization Save the Children was shot and killed. At first, the organization announced that it would continue working in the country, but five months after the killing ultimately decided to leave.

At this point, the situation doesn't seem that dire with regards to the ICRC: In an interview, Bernard Barrett, an ICRC spokesman, said, "We're not pulling out totally. We're suspending some activities -- we're maintaining life-saving services, particularly medical services." The organization's other work in Chad ranges from water sanitation projects to animal vaccinations; hardly trivial work, particularly given the persistent lack of food security. As far as resuming these activities, Barrett reports a wait-and-see scenario. "Once we've obtained the release of our delegate who was kidnapped, at that point we'll be able to ascertain the security situation," he says.

Chad is a country in dire need of help. Last May, Doctors Without Borders led the effort to combat an outbreak of meningitis, immunizing 7.5 million people in the region. DWB is another organization that has been driven to suspend operations in Chad because of the recent violence. It's terrible to contemplate how many deaths might have resulted from the 65,000 cases of infection in and around Chad had DWB left just six months earlier.  

The violence that has hindered desperately needed assistance ultimately stems from poor governance, said Richard Downie in an interview with FP. According to Downie, a fellow with the Africa Program at the Center for Strategic and International Studies, "Until you have credible political parties and some sort of civil society developing, it's hard to see the long-term prospects of Chad looking bright."

That sort of civil society seems a ways off. Chad ranks 173 out of the 180 countries surveyed in Transparency International's 2008 Corruption Perceptions Index, just three spots up from Afghanistan. And the country's heavily oil-dependent economy has only reinforced the political maladies that accompany "the devil's excrement."

It's tough to avoid Downie's conclusion: "I don't see a long-term solution to what's going on in Chad at the moment without much more engagement from the international community."

Photo:  FRANCESCO FONTEMAGGI/AFP/Getty Images

So it looks like FP contributor David Schenker was right: Muammar al-Qaddafi couldn't contain himself in his speech today at the U.N. General Assembly's opening session.

The Libyan strongman has been erratically working toward a rapprochement with the West, including abandoning his fledgling WMD programs, cooperating on counterterrorism, and opening up his country to oil investment. Even his execrable human-rights record has improved.

It's not exactly clear whether the elder Qaddafi himself is driving this process, or whether his son Saif al-Islam -- who hangs out with the Davos crowd and talks a good game on democracy -- is the brains behind this operation.

But as Schenker points out, Muammar is his own worst enemy. He's like that unpopular kid in your high-school math class who makes everyone laugh by saying outrageous things, but still doesn't have any friends (yeah, OK, that was me). And by comparing the Security Council to al Qaeda and suggesting that swine flu was cooked up in a laboratory, he's only reinforced that image today.

There's one reason, though, that Qaddafi's bizarre remarks today won't leave him completely isolated. Anyone have a wild guess?

Photo by EMMANUEL DUNAND/AFP/Getty Images

China's Economic Observer has put together the following map of overseas expansion by China's big three oil giants, CNOOC, CNPC, and Sinopec. Click through for the interactive version.

Notably absent from this map is Sudan, where CNPC has extensive and very controversial holdings. 

In May, FP and our readers enjoyed going through the many, many silly acronyms in use around the world, including PIIGS, STUC, MILF, and MANPADS. But last week's agreement between Nigeria and Russia on a joint gas venture has a name that tops all of those for awkardness:

It probably seemed a good idea at the time. But Russia's attempt to create a joint gas venture with Nigeria is set to become one of the classic branding disasters of all time -- after the new company was named Nigaz.

The venture was agreed last week during a four-day trip by Russia's president Dmitry Medvedev to Africa. The deal between Russia's Gazprom and Nigeria's state oil company was supposed to show off the Kremlin's growing interest in Africa's energy reserves.

Instead, the venture is now likely to be remembered for all the wrong reasons -- as a memorable PR blunder, worse than Chevrolet's Nova, which failed to sell in South America because it translates as "doesn't go" in Spanish[...]

An article in Brand Republic pointed out the obvious: that the name has "rather different connotations" for English-speakers.

Stan Marsh sympathizes.

DMITRY ASTAKHOV/AFP/Getty Images

 

There's a lot of competition for top crises these days -- what with Somali pirates going overboard, Pakistan and Afghansitan looking increasingly perilous, Mexico's chaos scarily peering over the border... 

But I vote for adding Nigeria to that very pressing list of concerns.

A new report released today, puts last year's death toll from unrest in the oil-producing Niger Delta region at 1,000. The almost-guerilla war dragged the economy down by $20.7 billion in lost oil revenue, with little sign of abating in 2009. With oil prices already lower, government revenues are falling. More worrisome -- the rebels in that region who earn most of their cash from oil bunkering will be short on dough, inspiring more of the kidnappings-for-ransom that already breached the 300 mark in 2008. NGO workers on the ground tell me that things will really heat up if the prices (or the oil production levels) drop much lower.

To add another twist, the main rebel group in the region, the Movement for the Emancipation of the Niger Delta (MEND), today e-mailed a statement rejecting an amnesty offer that members of the ruling party allegedly proposed. In classic form, the rejection is colorful: 

The Movement for the Emancipation of the Niger Delta rejects this evil agenda by the [ruling party] PDP and its cohorts and vow never to sell our birth right [to Nigeria's oil] for a bowl of porridge."

The deal itself was even more interesting: the government would provide fighter amnesty, prisoner release, and huge payouts to MEND in exchange for a rebel promise to help rig the coming elections in favor of the ruling party. That offer may well be an exaggeration on the part of the rebel spokesman. Then again, given Nigeria's rather wretched election history... it might not.

Why should this mess end up in the top echelon of global worries? Don't forget: Nigeria is the third largest oil supplier to the United States. And when regional powerhouses go down in flames, it can't bode well for any of the unlucky neighbors -- many of whom are recovering from their own bouts of conflict. 

Did I mention that the country's president might be dying? With that, you have it -- my Axis of Upheaval nomination: Nigeria. 

PIUS UTOMI EKPEI/AFP

Political scientist Gustavo Coronel, an oil expert and former member of the Venezuelan congress, believes the plummeting petroleum payouts will seal the fate of Hugo Chávez's Bolivarian dreams, thanks to the Venezuelan leader's habitual failure to invest in any form of state infrastructure.

Speaking at the Andes colloquium organized by the George Washington University and the Strategic Studies Insitute, Coronel explained just how deep mismanagement runs within the state-run oil sector. This threw me for a bit of a loop:

"Under Chávez the company [PDVSA] has lost about 500,000 barrels per day of production capacity, which amounts to a loss of income of about $30 to $50 million a day, depending on the price."

Ouch. Today, a barrel of crude petroleum is at a mere $39 on the Venezuelan market, down from soaring highs of roughly $145 earlier in 2008. To Coronel, this reality merely exacerbates the "termites" that have been eating the regime from within.

Coronel outlined three steps Chávez will now be forced to take, which may ultimately lead to his downfall:

1. Cutting his vast handouts to Venezuela's poor constituents, thus isolating his key demographic.
2. Eliminating/reducing foreign aid to sympathetic governments, who remain essential for his regional opposition to the United States..
3. Devaluing the Bolivar, inflicting further economic woe upon an economy already reeling from stark inflation and lack of foreign investment.

Having taken these steps, Coronel predicts Chávez will not only lose a constitutional referendum that would permit indefinite reelection -- similar to the failed attempt to ratify the country's constitution by popular vote in December 2007 -- but also fizzle well before his current term runs out in 2012.

Whenever he's suffered setbacks in the past, Chávez has always promised to accept the situation 'Por ahora' (For now). Save a petro rally, por ahora might be a while.

Photo: JUAN BARRETO/AFP/Getty Images

Petroleum Intelligence Weekly's annual ranking of the world's top oil companies - based on criteria like reserves, refining capacity, and sales - was just released, and there is just a bit of shuffling near the top. Four of the five top oil companies now are state owned - Saudi Aramco, Iran's NIOC, Venezuela's PDV, and China's CNPC. A few highlights:

• Saudi Aramco remains No. 1, and China's CNPC surpasses BP and Shell.

• Russia's Rosneft makes biggest jump, from 24th to 16^th.

• Majority state-owned national oil companies now make up 27 of 50.