www.forbes.com Reuters, 03.07.03, 7:32 AM ET By Barbara Lewis LONDON, March 7 (Reuters) - Nigerian oil production will be at least as high in April as in March, with the tally for both months expected to be near 2.3 million barrels per day (bpd), well above its official OPEC quota, traders said on Friday. Dealers said that they were still piecing together newly-issued April loading programmes, but it appeared that there would again be an abundant supply of crude. "Definitely there is at least as much crude as in March and April is a slightly shorter month," said one trader. "In all there will be about 2.3 million barrels per day, possibly more." "We don't have the complete picture, but I would think that levels will be at least as high as in March," said another. Traders have said Nigerian oil production has risen by some 200,000 bpd following the Organisation of the Petroleum Exporting Countries decision in January to step up production. At roughly 2.3 million bpd, Nigeria's estimated output is in excess of its February 1 OPEC quota of 2.0 million bpd, with production boosted by new oil coming onstream.

NEW FIELDS Exxon's Yoho field, which produced three cargoes in March, is scheduled to pump another three in April, amounting to close to 100,000 bpd, dealers said. Exxon Mobil Corp in February announced it had started production from the Yoho development offshore Nigeria, which has recoverable reserves of about 400 million barrels of a crude somewhere between Qua Iboe and Brass River in quality. Royal Dutch/Shell's new EA field has come onstream more slowly, with only one cargo traded so far since first oil was achieved on December 14. Dealers said they had not yet seen an April programme for EA, though it was possible there would be one cargo. Shell has said the field would eventually increase Nigeria's oil production capacity by some 140,000 bpd, but a spokeswoman said she was awaiting information and could not yet comment on production. Dealers are also waiting for Agip's new Abo field to begin producing, with the first cargo expected in May, traders said, while TotalFinaElf is scheduled to start production from its 125,000 bpd Amenam field around June. Precise monitoring of the size of Nigeria's crude loading programme is notoriously difficult as extra cargoes are issued after the formal schedule. The consensus in the market, however, is that Nigeria is pumping almost as much as it can in the current climate where West African crudes are seen as a safer alternative to Middle Eastern barrels. Operators are also keen to justify high start-up costs, traders say. OPEC agreed in January to raise production by seven percent to stave off an oil price shock threatened by the strike in Venezuela and a possible war in Iraq. The cartel meets again next week, with some member countries favouring a de facto temporary suspension of quotas should a war in Iraq shut in Baghdad's exports, a loss that would test the 11-member group's capacity limits. Nigerian Presidential Adviser on Petroleum and Energy Rilwanu Lukman said in February Nigeria could quickly raise its output to 2.5 million bpd if necessary.

businessresources.smh.com.au By Alex Lawler March 8 2003

OPEC, which pumps a third of the world's oil, may struggle to lower prices from among the highest levels in 12 years as the threat of war with Iraq builds and members near their limit for output.

Ministers meeting in Vienna on Tuesday would probably approve a plan backed by Saudi Arabia to pump as much oil as possible should a war disrupt supply from Iraq, the third-largest Middle East producer, officials and analysts said.

Oil prices last week reached the highest since Iraq invaded Kuwait in 1990 and touched $US39.99 a barrel in New York, raising fuel costs and threatening to stunt economic growth. Only Saudi Arabia and the United Arab Emirates have the capacity to refill US inventories, which set a 28-year low last month.

"There isn't enough OPEC capacity to cover the loss of Iraq," said Leo Drollas, deputy executive director of the Centre for Global Energy Studies in London. "We're entering a probable war with low inventory cover. Prices could go higher still as the war drums beat louder."

Ten OPEC countries set oil-output quotas as a way to control oil prices and supply, and member Iraq has no quota because its sales are under United Nations oversight. The group raised quotas in January and February after exports from Venezuela were crimped by a strike and a colder-than-normal winter raised demand.

Oil ministers will set policy for the second quarter as analysts expect any US-led attack on Iraq, source of 2.5 million barrels a day or 3 per cent of the world's oil, to take place within weeks. Oil demand normally declines after the first quarter because of the northern hemisphere spring.

Indonesia oil minister Purnomo Yusgiantoro said OPEC should keep quotas unchanged until the group knows the result of the stand-off between the US and Iraq. Saudi Arabia, the United Arab Emirates and Kuwait wanted to raise quotas, he said.

Whether OPEC suspends restraints or not, members are ignoring them. In February, all nations exceeded their output quota except Indonesia and Venezuela, members unable to pump more.

"They already have an informal understanding that everybody should produce as much as they can," said Adam Sieminski, an oil strategist at Deustche Bank. "Probably the best decision that OPEC could make is steady as she goes."

OPEC's oil production rose 6.3 per cent in February, the biggest monthly increase in four years, as output in Venezuela rebounded after the two-month strike and other nations pumped more, a Bloomberg News survey this week showed.

Analysts put OPEC's spare capacity at about 2 million barrels a day, less than Iraq's daily output. Two million barrels is enough to meet daily demand in France, the world's fifth-largest economy. The situation would worsen should Kuwait close oil fields in the event of war. Kuwait, OPEC's sixth-largest producer in February, said this week it would close all northern oil fields if the US attacks neighbouring Iraq to avert damage. The fields produce about 500,000 barrels a day.

Prices might not drop until additional oil from Saudi Arabia reaches consumers and the situation over Iraq becomes clearer, analysts said. Saudi Arabia was already producing about 9 million barrels a day, they said.

"The Saudis have dramatically increased their production," Mr Sieminski said. "That oil should be hitting the markets over the next few weeks, and assuming that things don't go badly in Iraq, we should begin to see inventories building. That should bring prices down."

Executives at companies including BP and Royal Dutch/Shell Group have said they expect a jump in oil prices should the US proceed with an attack on Iraq. Prices in London rallied to $US40.95 during the invasion of Kuwait, and sank to $US16 as the ejection of Iraqi troops neared.

The US and other importing countries hold inventories to alleviate shortages, which may have to be tapped should an attack disrupt Middle East shipments, analysts said.

Bloomberg

www.gamji.com by Ahmed

The NNPC Group Executive Director of Refinery and Petrochemicals, Alhaji Mansir Ahmed, has attributed the present fuel scarcity to increased domestic consumption.

Briefing newsmen at the ongoing Kaduna International Trade Fair on Wednesday, Ahmed said the consumption rate had increased from 18 million litres to 26 million litres daily.

He also said consumption usually increased during festivities such as Sallah and Christmas to about 30 million litres per day.

Ahmed explained that while the country now consumed 26 million litres daily, it could only produce about one half of that quantity.

He said preparations by the U.S. to attack Iraq made it impossible for petroleum production to circulate within OPEC member states, thereby contributing to the factors causing fuel scarcity in the country.

The director further said because of the impending war against Iraq, Nigeria could not import fuel to complement domestic production in January and February.

He said Nigeria could not also import fuel from Venezuela to address the present shortage because the South American country too had product shortages resulting from disruptions in its system.

Ahmed appealed to Nigerians to exercise patience as efforts were being made by the NNPC to ensure adequate supply of fuel throughout the country.

www.bayarea.com Posted on Fri, Mar. 07, 2003 By Andrew Bridges ASSOCIATED PRESS

LOS ANGELES - Sen. Barbara Boxer called Thursday for a federal investigation into California's soaring gasoline prices amid concerns the market is being manipulated in ways reminiscent of the power crisis that convulsed the state two years ago.

In a letter to U.S. Comptroller General David M. Walker, the California Democrat asked the General Accounting Office to look at news reports that oil companies are taking more refineries than normal off line for maintenance. Such a move presumably would curtail the state's gasoline supply and send prices spiraling upward.

"I am extremely concerned about the rising gasoline prices in the state of California, and I call on you to investigate this situation, particularly with regard to the possible manipulation of supply due to idle refineries," Boxer wrote.

Boxer also sent letters to the state's seven largest oil companies, asking for records that show how many hours their refineries were off-line over the last four months and during the same time period a year ago.

"This is reminiscent of the electricity crisis when generators took their plants off-line for 'routine maintenance' at a rate higher than normal," Boxer wrote.

Nicole Hodgson, a spokeswoman for San Ramon-based ChevronTexaco Corp., said the company had not yet received the letter and could not comment. She did say that more than two dozen similar state and federal investigations conducted over the last two decades uncovered no evidence of wrongdoing.

"Refiners have not engaged in illegal conduct," Hodgson said.

Telephone messages left for the other companies -- ConocoPhillips, Tesoro Petroleum Corp., Shell Oil Co., ExxonMobil Corp. and Valero LP -- were not immediately returned.

The average retail price of gas in California hit $2.04 this week, an all-time record for the state. (When adjusted for inflation, however, prices are still lower than they were during the Iran hostage crisis.)

The oil industry attributes the price hike to rises in the cost of crude, now at a two-year high. Although supply remains steady, some say the jump is partly due to jitters about war in the Middle East and civil unrest in Venezuela.

www.canada.com CATHERINE SOLYOM The Gazette Friday, March 07, 2003

What to pay: the mortgage or the heating bill?

That was the dilemma facing Carolina Villaseca when arctic winds and the prospect of war in Iraq conspired to send the price of heating oil through the roof, from about 44 cents a litre in November to 66 cents today.

"We had to pay the mortgage and all our debts and we just couldn't afford the heat," said Villaseca, a new mother living in Laval, whose monthly oil bill almost doubled this year to $300.

"But if we didn't heat, the pipes would burst, and you can't let a baby go without heat."

Villaseca turned to Sun Youth, which helped provide a half-tank of fuel in February.

She wasn't the only one caught between a rock and a cold place. Since January, Sun Youth, along with the Quebec Heating Oil Association, has helped about 100 families in Greater Montreal heat their homes.

The beneficiaries include a family with four small children; a family sleeping with its stove on, and using candles to keep warm; a woman whose budgie froze to death; and senior citizens who simply couldn't afford to pay for the oil delivery.

"It's been an exceptional year," said Sid Stevens, executive director of Sun Youth, which helped 40 families with their fuel bills all last year. "The only difference between the homeless and some families is that some families have a civic address. But they still live in the cold."

Sun Youth also turned down about 100 families when it saw they could pay for the heat - but didn't want to.

Of those, there are thousands.

"One customer came in screaming about his bill, calling us all thieves and asking 'How come my neighbour pays less?' " said a representative of fuel supplier Joseph Elie Ltd., affiliated with Petro Canada, who would not give her name. "But we offered him 41.9 cents a litre guaranteed in July and he refused. So what do you want us to do about it? The price went up."

Unfortunately, most Montrealers, lulled by 10 years of relatively low oil prices and mild winters, decided not to go with a fixed rate, or secure a cap on the price of oil when it was offered in the summer, said Hélène Tomlinson of the Quebec Heating Oil Association. "They decided to take their chances, not knowing about the strike in Venezuela or war in Iraq. Now they are up a creek and there are a lot of divorces over it."

While natural gas prices rose about 59 per cent this winter because of higher demand, and electricity went up 18 per cent, heating oil followed the same trajectory as crude oil, which shot up from $24.85 U.S. a barrel in November to $37 yesterday.

"People blame the oil companies - or the delivery guy," Tomlinson said. "But we can't control the weather or what happens in Iraq."

And after giving home heating rebates in the winter of 2001 to a number of prison inmates and dead people, the federal government is unlikely to step in again.

Heating Oil Prices

Not including taxes or volume discounts (in cents/litre)

Avg. Avg. Avg. Avg. Avg. Feb. 24 March 3 Area 2001-02 Nov. '02 Dec. '02 Jan. '03 Feb. '03 2003 2003 Townships 38.7 43.8 46.8 50.9 59.5 62.4 64.7 Montreal 39.7 44.4 47.2 51.8 60.6 63.5 66.2 Laval 39.9 44.9 47.7 52.3 61.4 64.4 66.5 Laurentians 39.1 44.2 46.8 50.9 59.5 62.1 65.6 Outaouais 44.2 48.5 50.1 54.4 63.8 66.1 69.5

SOURCE: rÉgie de l'énergie du québec csolyom@thegazette.canwest.com