EUROPEAN GAS MARKET: PIPELINE GAS VS LNG

By Feso Bright

European Gas in the World Energy Mix

Europe has an increasingly diverse energy mix but records a significant dependence on natural gas to meet its energy requirement with a minimum of approximately 25% of its energy supply as at 2008- shown in table 1.

Table 1: Total Europe Primary Energy Supply (KTOE): 2006 to 2008

Source: (International Energy Administration, Cited in Bright, 2009, p. 6)

Natural gas is the cleanest fossil fuel available and due to efficiency, relatively low capital cost (OECD/ IEA, 2005, p. 64) as well as other demand drivers, natural gas is an important energy source in the energy mix of Europe.

How does the gas market work?

Product and Value Chain

There are three major stages in the gas value chain as shown in figure 1 below:

Figure 1: Natural Gas Industry Value Chain

Source: (Energy Information Administration, 2010)

The first phase covers all exploration and production activity in which the gas is obtained up to wellhead, separated and processed. The second phase involves compression and transmission to storage, national distributors or main grid points. The third phase involves the distribution and transportation of natural gas or LNG (Liquefied Natural Gas) via trains or pipelines to other markets or the end consumer respectively (Energy Information Administration, 2010). Various regional and market structures exist for the operation of the natural gas value chain but they all share in common two saleable end products which emerge from this value chain; natural gas and LNG. LNG is however, always regasified (converted back into natural gas) at destination point.

Transportation and Trade in focus: Pipeline Gas versus LNG

Pipelines and LNG trains/tankers are the only commercial means of transportation and distribution of natural gas and LNG for Europe today. Most of Europe’s pipeline gas comes from Russia which accounts for 38% of its imports as shown in figure 2, with Norway and Netherlands following closely. Figure 3 shows that Algeria is the primary supplier of LNG to Europe with 35% of its imports while Nigeria and Qatar following.

Figure 2: Pipeline Sources for Europe 2008

Source: (Cedigaz, cited in British Pertroleum, 2009, p. 30)

Figure 3: LNG Sources for Europe 2008

Source: (Cedigaz, cited in British Pertroleum, 2009, p. 30)

Overall, Europe had a 55% share of total world gas imports while its share of natural gas and LNG are 24% and 67% respectively- as shown in table 2.

Table 2: Distribution of EU and World Gas imports 2008 (BCM) Billion Cubic Meters

Source: (Cedigaz, cited in British Pertroleum, 2009, p. 30)

The nature of the import and transportation sources has implications for security of supply and economics of investing in supply options. Consumption and Production drivers when understood also provide a background which enables an understanding of the supply gap and its implications.

Economics of Transportation: Pipeline versus LNG cost and scale

Figure 4: Transportation costs and the effect of scale

Source: (Jensen, 2007, p.3)

Figure 4 reveals that the exhorbitantly capital expenditure makes short distance LNG transportation unfeasible compared to pipeline; it also shows that long distance LNG transportation appears to be less costly than pipeline use. Nonetheless, pipelines vary in capacity and in terms of terrain (offshore, onshore) as above. Also, figure 5 below reveals that pipelines offer more economies of scale than LNG; which is an attractive feature from a business and margins stand point.

Figure 5: Costs of moving Gas & LNG over 1,200 miles

Source: (Jensen, LNG VS PIPELINES. Economic and Technical Pros and Cons, 2007)

It has been established that LNG transport cost is susceptible to unexpected upward cost swings (Jensen, 2007), however it must be noted that the notion of cost as the sole value driver is inaccurate. Competition from other sources of supply, distribution networks in the downstream (Jensen, 2007) and other factors combine to influence strategic choices.

NUTSHELL:

This is not the end of the analysis though. Typically one would want to examine the European consumption and production levels as well as the drivers of demand and supply; as these necessarily affect the choice between LNG and Pipeline transportation. On the whole, pipelines and lng transportation are necessary links in answering the Europe Security of Energy Supply question.

German Military think tank on Energy Security

Military Study Warns of a Potentially Drastic Oil Crisis

By Stefan Schultz

A study by a German military think tank has analyzed how "peak oil" might change the global economy. The internal draft document -- leaked on the Internet -- shows for the first time how carefully the German government has considered a potential energy crisis.

The term "peak oil" is used by energy experts to refer to a point in time when global oil reserves pass their zenith and production gradually begins to decline. This would result in a permanent supply crisis -- and fear of it can trigger turbulence in commodity markets and on stock exchanges.

The issue is so politically explosive that it's remarkable when an institution like the Bundeswehr, the German military, uses the term "peak oil" at all. But a military study currently circulating on the German blogosphere goes even further.

The study is a product of the Future Analysis department of the Bundeswehr Transformation Center, a think tank tasked with fixing a direction for the German military. The team of authors, led by Lieutenant Colonel Thomas Will, uses sometimes-dramatic language to depict the consequences of an irreversible depletion of raw materials. It warns of shifts in the global balance of power, of the formation of new relationships based on interdependency, of a decline in importance of the western industrial nations, of the "total collapse of the markets" and of serious political and economic crises.

The study, whose authenticity was confirmed to SPIEGEL ONLINE by sources in government circles, was not meant for publication. The document is said to be in draft stage and to consist solely of scientific opinion, which has not yet been edited by the Defense Ministry and other government bodies.

The lead author, Will, has declined to comment on the study. It remains doubtful that either the Bundeswehr or the German government would have consented to publish the document in its current form. But the study does show how intensively the German government has engaged with the question of peak oil.

Parallels to activities in the UK

The leak has parallels with recent reports from the UK. Only last week theGuardian newspaper reported that the British Department of Energy and Climate Change (DECC) is keeping documents secret which show the UK government is far more concerned about an impending supply crisis than it cares to admit.

According to the Guardian, the DECC, the Bank of England and the British Ministry of Defence are working alongside industry representatives to develop a crisis plan to deal with possible shortfalls in energy supply. Inquiries made by Britain's so-called peak oil workshops to energy experts have been seen by SPIEGEL ONLINE. A DECC spokeswoman sought to play down the process, telling the Guardian the enquiries were "routine" and had no political implications.

The Bundeswehr study may not have immediate political consequences, either, but it shows that the German government fears shortages could quickly arise.

Part 2: A Litany of Market Failures

According to the German report, there is "some probability that peak oil will occur around the year 2010 and that the impact on security is expected to be felt 15 to 30 years later." The Bundeswehr prediction is consistent with those of well-known scientists who assume global oil production has either already passed its peak or will do so this year.

Market Failures and International Chain Reactions

The political and economic impacts of peak oil on Germany have now been studied for the first time in depth. The crude oil expert Steffen Bukold has evaluated and summarized the findings of the Bundeswehr study. Here is an overview of the central points:

• Relapse into planned economy: Since virtually all economic sectors rely heavily on oil, peak oil could lead to a "partial or complete failure of markets," says the study. "A conceivable alternative would be government rationing and the allocation of important goods or the setting of production schedules and other short-term coercive measures to replace market-based mechanisms in times of crisis."

• Oil will determine power: The Bundeswehr Transformation Center writes that oil will become one decisive factor in determining the new landscape of international relations: "The relative importance of the oil-producing nations in the international system is growing. These nations are using the advantages resulting from this to expand the scope of their domestic and foreign policies and establish themselves as a new or resurgent regional, or in some cases even global leading powers."
• Increasing importance of oil exporters: For importers of oil more competition for resources will mean an increase in the number of nations competing for favor with oil-producing nations. For the latter this opens up a window of opportunity which can be used to implement political, economic or ideological aims. As this window of time will only be open for a limited period, "this could result in a more aggressive assertion of national interests on the part of the oil-producing nations."
• Politics in place of the market: The Bundeswehr Transformation Center expects that a supply crisis would roll back the liberalization of the energy market. "The proportion of oil traded on the global, freely accessible oil market will diminish as more oil is traded through bi-national contracts," the study states. In the long run, the study goes on, the global oil market, will only be able to follow the laws of the free market in a restricted way. "Bilateral, conditioned supply agreements and privileged partnerships, such as those seen prior to the oil crises of the 1970s, will once again come to the fore."
• Market failures: The authors paint a bleak picture of the consequences resulting from a shortage of petroleum. As the transportation of goods depends on crude oil, international trade could be subject to colossal tax hikes. "Shortages in the supply of vital goods could arise" as a result, for example in food supplies. Oil is used directly or indirectly in the production of 95 percent of all industrial goods. Price shocks could therefore be seen in almost any industry and throughout all stages of the industrial supply chain. "In the medium term the global economic system and every market-oriented national economy would collapse."
• Global chain reaction: "A restructuring of oil supplies will not be equally possible in all regions before the onset of peak oil," says the study. "It is likely that a large number of states will not be in a position to make the necessary investments in time," or with "sufficient magnitude." If there were economic crashes in some regions of the world, Germany could be affected. Germany would not escape the crises of other countries, because it's so tightly integrated into the global economy.
• Crisis of political legitimacy: The Bundeswehr study also raises fears for the survival of democracy itself. Parts of the population could perceive the upheaval triggered by peak oil "as a general systemic crisis." This would create "room for ideological and extremist alternatives to existing forms of government." Fragmentation of the affected population is likely and could "in extreme cases lead to open conflict."

The scenarios outlined by the Bundeswehr Transformation Center are drastic. Even more explosive politically are recommendations to the government that the energy experts have put forward based on these scenarios. They argue that "states dependent on oil imports" will be forced to "show more pragmatism toward oil-producing states in their foreign policy." Political priorities will have to be somewhat subordinated, they claim, to the overriding concern of securing energy supplies.

For example: Germany would have to be more flexible in relation toward Russia's foreign policy objectives. It would also have to show more restraint in its foreign policy toward Israel, to avoid alienating Arab oil-producing nations. Unconditional support for Israel and its right to exist is currently a cornerstone of German foreign policy.

The relationship with Russia, in particular, is of fundamental importance for German access to oil and gas, the study says. "For Germany, this involves a balancing act between stable and privileged relations with Russia and the sensitivities of (Germany's) eastern neighbors." In other words, Germany, if it wants to guarantee its own energy security, should be accommodating in relation to Moscow's foreign policy objectives, even if it means risking damage to its relations with Poland and other Eastern European states.

Peak oil would also have profound consequences for Berlin's posture toward the Middle East, according to the study. "A readjustment of Germany's Middle East policy … in favor of more intensive relations with producer countries such as Iran and Saudi Arabia, which have the largest conventional oil reserves in the region, might put a strain on German-Israeli relations, depending on the intensity of the policy change," the authors write.

When contacted by SPIEGEL ONLINE, the Defense Ministry declined to comment on the study.

Source: http://www.spiegel.de/international/germany/0,1518,715138,00.html

NUTSHELL:

I personally don't believe that the source of the ''leaked'' document is the German military; however this post is instructive for some reasons. First of all, this is a lesson in ''scenario analysis''- a management tool used to plot various hypothetical or likely cases of events in the future. We can't predict the future but the astute planner will consider various case scenarios; Shell is a famous example of successful application of scenario analysis. Second, when people talk of peak oil, one thing that rings a bell in the head is oil and gas economics! Lionel Robbins defines economics as the science which studies human behaviour as a relationship between ends and scare means which have alternative uses. 'Ends' are things which we want and the 'Means' are how we go about satisfying these wants. 'Alternative uses'- suggests the existence of 'opportunity cost'- a prioritising of needs, alternatives forgone and scheduling of resources to meet these needs and wants. 

At the risk of sounding dismissive about peak oil, I will suggest that when there are alternatives to oil in the long term why would we cry 'dooms day'? The world is not about to have an energy crisis (check the latest Energy outlook 2010 from EIA/ IEA)- rather the world may be on the verge of an energy transition. Finally, I would like to make a clarification on the statement that 'oil will determine power'. Oil will only determine power if it is 'cheap cost oil'. Countries with good geography, sweet, light crude and above all, the lowest marginal cost of lifting oil are the countries with the real power; thus having oil reserves alone is a necessary but insufficient condition to becoming an international power broker. Nontheless, ENERGY SUPPLY SECURITY is a major concern for every nation and the level of energy supply security or insecurity of each nation determines to a large extent how vulnerable its economy is to the global shocks occasioned by the market dynamics of oil and gas.

Top 10 Energy Stories of 2010

By Robert Rapier

Here are my choices for the Top 10 energy related stories of 2010. I can’t remember having such a difficult time squeezing this list down to 10 stories, because there were many important energy stories for 2010. It was hard to cut some of them from the Top 10; so hard that I almost did a Top 15. But I made some difficult choices, and offer my views on the 10 most important energy stories of 2010. Previously I listed a link to Platt’s survey of the Top 10 oil stories of 2010, but my list covers more than just oil.

Reviewing my list of Top 10 Energy Related Stories of 2009, I see that I made three predictions. Those predictions were:

• China’s moves are going to continue to make waves
• There will be more delays (and excuses) from those attempting to produce fuel from algae and cellulose
• There will be little relief from oil prices.

Given that total energy demand from China surpassed that of the U.S. in 2010 (five years earlier than expected), the EPA twice rolled back cellulosic ethanol mandates (and there are still no functioning commercial plants), and we are closing the year with oil above $90 per barrel, I would say I nailed all of those.

For this year’s list, don’t get too hung up on the relative rankings. They are mostly subjective, but I think we would have fairly broad agreement on the top story.

1. Deepwater Horizon Accident

On April 20, 2010 the BP-owned Deepwater Horizondrilling rig exploded, killing 11 men working on the rig and injuring 17 others. Because of the depth of the rig, there was no easy way to cap it and it gushed oil until it was finally capped three months later on July 15th. In the interim, the leak released almost 5 million barrels of oil into the Gulf of Mexico, making it thelargest accidental marine oil spill in the history of the petroleum industry. In fact, not only was this my top energy story of the year, according to a poll of AP writers and editors it was the top news story period.

2. The Deepwater Horizon Fallout

While the accident itself was the biggest story, there was much fallout from the incident that will continue to be felt for years. Just three weeks before the incident, President Obama had proposed to open up vast new areasoff the Atlantic coast, the eastern Gulf of Mexico, and the north coast of Alaska. Governor Schwarzeneggar was pushing for offshore oil drilling near Santa Barbara County. There was a great deal of momentum that promised to greatly expand the areas available for offshore production. In the wake of the disaster, the debate shifted sharply. President Obama canceled a planned August offshore drilling lease sale in the Western Gulf and off the coast of Virginia, citing that his “eyes had been opened” to the risks of offshore drilling. The administration also put a temporary deepwater drilling ban in place until additional safety reviews could take place. Governor Schwarzeneggar dropped his plans, citing the spill as evidence that offshore drilling still poses too great a risk.

But there were far-reaching impacts in other areas. BP began to sell off assets, raising $10 billion to pay claims of those impacted by the spill. BP CEO Tony Hayward — after a series of gaffes — stepped down from the helm of BP. Around the area affected by the spill, people lost jobs, particularly in the fishing and tourism industries. The long-term environmental impact remains uncertain, with some groups claiming the area has recovered, and others stating that it will be years before the full environmental impact can be determined.

3. China Becomes World’s Top Energy Consumer

For more than a century, the United States has been the world’s top consumer of energy. In 2010, China surpassed the U.S. in total energy consumption. If not for the Deepwater Horizon accident, this would have easily been my #1 story. As I said last year, I believe that China will be the single-biggest driver of oil prices over at least the next 5-10 years.

4. Matt Simmons Dies

On October 8th, I came into my office to the shocking news that Matt Simmons, Peak Oil guru and author of the book Twilight in the Desert, had died. Matt was an important voice on the topic of peak oil, preaching about the dangers of peak oil everywhere he went. I discussed the impact that Matt’s book had on me here. Were it not for his tragic passing, the energy world would now be discussing the results of the famous Simmons-Tierney bet, which would have been settled following the last day of 2010. Tierney just discussed the results of the bet in a New York Times column: Economic Optimism? Yes, I’ll Take That Bet.

5. Oil Prices Back Above $90

One of my predictions for this year was that there would be little relief from oil prices, and that this would make economic recovery from the recession very difficult. Indeed, oil prices traded for most of the year in the $75-$85 range, but by year end broke above $90.

6. Ethanol

Ethanol policy was in the news all year long. There was a long and contentious debate on extension of the ethanol tax credits and import tariffs, but the ethanol industry once more got what they wanted when their tax credits and protective tariffs were extended for another year. The EPA made a decision that E15 could be used in newer vehicles, but it isn’t expected to have much impact as few retailers seem willing to risk the legal exposure of someone putting E15 into the wrong car and damaging it. Cellulosic ethanol mandates were twice rolled back during the year when projected production fell far short of the mandate. The initial mandate called for 100 million gallons of cellulosic ethanol in 2010, but actual qualifying production year to date has been zero.

7. Electric Cars Start Rolling Off Assembly Lines

Electric cars were a hot news item throughout 2010. By year’s end, both the Chevy Volt and Nissan Leaf began to be delivered to customers. At $41,000 and $33,000 respectively, it will be interesting to see whether the market embraces these cars.

8. Russian Crude Output Climbs

Russian crude oil output continued its post-Soviet climb, eclipsing last year’s record production rate. Production for 2010for crude oil plus condensate was just under 10 million barrels per day. Other countries that were in the news during the year for either increasing output or having very good prospects were Columbia, Iraq, and Uganda. At the other end of the spectrum was Venezuela, where mismanagement has continued to run their oil industry into the ground. While the Venezuelan government has denied the problems, the recent release of the Wikileaks diplomatic cables detailed their troubles.

9. Militaries Acknowledge Peak Oil Threat

There were two major military-related stories on peak oil in 2010. First, the US Joint Forces Command issued a report (story here) that warned of the potential for a 10 million barrel per day shortfall of oil by 2015. Then, in late summer a study on peak oil by a German military think tank was leaked on the Internet. I reported on the translated highlights, which included warnings of the potential for regional shortages, market failures, and a shift in political power toward those capable of exporting oil.

Part of the U.S. military’s response to the threat of Peak Oil has been to carry out a number of initiatives around biofuels and improved energy efficiency. In an interview with Tom Hicks, who is the Deputy Assistant Secretary to the Navy for Energy (Link to: Part I, Part II, Part III), he explained that the intent was that by 2012 the navy would put a carrier strike group in local operations entirely on alternative fuels and then in 2016 deploy that strike group on all alternative fuels. By 2020, the goal is that 50% of all of the Navy’s energy consumption will come from alternative sources.

10. The IEA Recognized Peak Oil

In their World Energy Outlook 2010, the International Energy Agency stated that it was possible that conventional oil “never regains its all-time peak of 70 million barrels per day reached in 2006.” However, they did not foresee this as a problem, as they believe natural gas, deep water drilling, and oil sands will avert a supply crunch.

Predictions for 2011


As for predictions for 2011’s top stories, I believe high oil prices will continue to put a strain on the economies of oil-importing nations. I expect that we will see oil prices once again head above $100 per barrel, although I expect the annual average for 2011 to be below $100 because of sluggish economies. I also expect that the bills are going to start coming due for some of the high profile ‘next generation’ biofuel producers, and that we will see bankruptcies from some of the companies I have discussed in this column. Some of them — probably most of them — do not have a sustainable business model, and the length of time they will be able to avoid bankruptcy is going to be solely dependent on how much cash they can manage to get infused into their operations


Source: http://theenergycollective.com/robertrapier/49083/my-top-10-energy-related-stories-2010?utm_source=feedburner&utm_medium=twitter&utm_campaign=The+Energy+Collective+(all+posts)

NUTSHELL:

Robert Rapier has made his top 10 choice as listed above. You can vote for your top 10 oil stories by clicking here. (1) While he chooses to highlight the importance of peak oil I would elect to focus on the stories informing us that the Big Oil producers are plunging into US shale gas; as well as the stories on shale gas drilling. I have a question for the peak oil theorists though; if the whole world succeeds in the transition from oil consumption to gas consumption for its energy needs (including the fueling of cars), then when does the world reach peak gas?. What are your top energy stories of 2011? (2) I believe so strongly that the BP brand is tired and in need of a rest. The company has set up a fund to compensate the victims and communities affected by the record oil spill. Apart from this lie several law suits that could bring the organization to its knees. Like never before we observe a company utilizing its public relations machinery as well as deploying its socio-political arsenal to weather the storms of the famous american lawsuits. It really takes alot to bring a ''Big Oil'' corporation down, however its my opinion that a change of brand will reduce that risk.

You've heard- Ghana Bread, Chocolate, Gold and now- Ghana Oil!!!!!!!

Lessons from Ghana’s first oil journey

By Stephen Nuwagira 

in Accra, Ghana 

GHANA joined the elite club of oil producers recently when it launched commercial production at its offshore Jubilee field in the western region. Commissioning the project, President John Atta Mills said: “It has not been an easy journey. 

“There have been ups and downs, but today we thank God Almighty for making it possible for Ghana to officially pour out its oil.” But he warned the people not to expect the country to be transformed overnight, calling for togetherness to ensure that oil benefits all and does not turn into a curse. 

The Jubilee field, located 60km in the Atlantic Ocean, was discovered and developed by Tullow Oil Ghana and five partners - Anandarko Petroleum, Kosmos Energy, the Ghana National Petroleum Corporation (GNPC), Sabre Oil and Gas and the E O Group. 

Ghana is projected to earn $485m from the oil field in the first year, shooting to $1b later. It will be producing 50,000 barrels of oil per day (bpd) in the first three to four months, increasing to 120,000 bpd. The country’s first exports start in January, the GNPC chief executive officer, Nana Asafa Adjaye, said. However, Ghana is yet to enact the necessary laws to govern the sector, meaning that oil firms can use the loophole to their advantage if the rules are not put in place faster. Such a state of affairs is a lesson for countries like Uganda, which are planning to start commercial oil production. 

Uganda is involved in a capital gains tax row with Tullow for the past several months. But this could have been avoided had there been clear laws, argued Moses Asaga, the Ghanaian parliamentary committee on energy boss. 

He pointed out that Ghana was recently caught off guard when Kosmos Energy tried to sell its stake in the Jubilee field. But they did not have the necessary laws for such a transaction at the time. However, they moved fast and drafted a policy to govern such sales. Although the deal did not materialise, Asaga adds, it made Ghana ready should such a situation arise in future. He advises that where there are ambiguous laws, the governments and firms involved should discuss and agree on the way forward for the good of the sector.He argues that it is not good for governments and oil firms to fight over issues that can be settled amicably. 

Ghana is also improving its oil revenue sharing and management laws and has set up two funds. The Heritage Fund is aimed at ensuring that future generations also benefit when the resource is exhausted. The Stabilisation Fund will be used to plug revenue shortfalls or in times of financial distress. 

The country is also planning to set up an investment advisory committee to manage oil funds and advise the government where to invest the oil cash. 

Although Ghana is working on these laws belatedly, Uganda has more time to make the required laws that could ensure that the oil revenue is utilised well and invested properly. Uganda could also borrow a leaf from Ghana’s unitisation policy, currently before Parliament. “The policy promotes joint development of oil and gas by two or more countries when the resources transcend borders, to avoid conflicts,” Asaga said. The wrangling over the borderline in Lake Albert that is shared by Uganda and the DR Congo, which has led to loss of lives during the clashes, is the case in point. 

We could also pick a leaf from the way Ghana positioned herself by ensuring that the GNPC, a government body and one of the Jubilee partners, is fully involved in the oil exploration and drilling. Therefore, Ghana gets taxes and money from its shares in the oil fields. This also ensures proper monitoring since the government is fully involved. On the other hand, as the oil starts following, Ghanaians’ expectations have skyrocketed, just like most Ugandans look at the oil find in the Bunyoro region. Most people think their lot will change overnight as they cash in on the oil monies. But this is false hope, according to Forson Ato, a Ghanaian MP. Ato says expectations are important, but must be well managed to stem dissatisfaction and mistrust among the masses. 

He said the masses need to be educated on how to manage their expectations and ensure that leaders and oil firms account for the use of the oil cash. Ghana is yet to do this. 

As Uganda prepares to start commercial oil production, it is vital to learn from Ghana’s mistake and start educating the people, especially those surrounding the oil areas in the Albertine Graben, how to handle their expectations. Early planning by the governments for the oil areas and the country at large to avoid last minute efforts is essential too. Helping people to establish enterprises can enable Ugandans benefit from the oil industry. 

Aidan Heavey, the Tullow chief executive, says it is a responsibility of governments and oil firms to ensure all people benefit from the oil cash. According to a top official at the E O Group, the only local partner in the Jubilee venture, it is better to “go out and take the bull by the horn.” He argues that if citizens do not set local enterprises to provide services to oil firms, foreigners will fill the gap, meaning that all the profits will be repatriated. 

Bob Ken, a Ghanaian lawyer and a governance and management analyst, says people’s expectations can best be managed by building social infrastructure like roads, health centres and schools, especially in the oil-rich areas, and setting up of hi-tech industries to provide employment opportunities and improving the standards of living. This, he adds, the Ghanaian government has plans that will ensure the country’s western region gets a good share 

of the oil revenue and spreading the benefits across the country. 

He is against the idea of communities in the oil-rich areas to demand a specific share of the oil cash, arguing that treating them in a special way is not a right, but social justice since they would be the ones to be most affected by oil activities. He calls for openness in dealing with the oil money or the oil companies. 

This, he adds, will enhance trust and prevent conflicts, saying Norway and Canada have done it with resounding success. 

Source:  http://links.visibli.com/links/8c1902

NUTSHELL:

As a Nigerian I find this story particularly interesting for one reason; here we have Uganda taking Oil and Gas lessons from Ghana- a country which will only start full exports of crude in January 2011. Nigeria has been pumping crude oil for decades. This reference to Nigeria is not so much in the merits or demerits of the Nigerian system of laws governing oil and gas but in the ''Ghanaian way''; this way has produced the famous ghana bread, ghana chocolate, ghana gold and now ghana oil. The country has successfully managed its resources and has produced internationally competitive products and brands. Now other countries are looking to this virgin oil and gas territory for lessons; this is a statement of work well done. Go on Ghana!!!....The world is watching you.