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The Niger Delta suffers another oil spill

The Niger delta has experienced another oil spill from one of Shells pipelines. Local environmental activists have said that it ranks as one of the worst in Nigeria for years.

The late November spill happened in Okolo Launch on Bonny Island. According to an investigation by shell and government officials 3,800 barrels have spilled recently, but 1,200 barrels had been recovered as of Tuesday.

In spite of efforts to manage the spill, vast quantities of oil have reached the shore and have started to have an adverse effect on the fragile ecosystem. "We saw dead fish, dead crabs ... This spill occurred 7-8 nautical miles from the shore ... so the volume runs into thousands of barrels," Alagoa Morris, head of the Niger Delta Resource Center for Environmental Rights Action

20 million people and 40 different ethnic groups inhabit areas of the delta, it is the largest wetland in Africa and contains one of the highest concentrations of biodiversity on the planet. The unique ecosystem also has more species of freshwater fish than any ecosystem in West Africa.

Shell has placed the blame for the spill on failed crude theft, and claims that over the last five years 70 percent of all oil spills have been the result of sabotage.

However, Shell has recently been held accountable for the environmental damage caused by a 2011 oil leak in the offshore Bonga oil field, this incident saw nearly 40 thousand barrels of oil drained into the sea. The Nigerian parliament determined that Shell must pay nearly 4 billion dollars (3.2 billion euros).

In a recent investigation Amnesty International revealed that Shell has repeatedly made false claims about the size and impact of two major oil spills at Bodo in Nigeria that happened back in 2008. The aim of the company was to minimize its compensation payments for the damage caused to 15,000 people whose livelihoods were devastated by oil pollution. In a high-profile compensation case in England’s High Court, Shell did confirm that the two spills had been far greater than the previously believed. Yet Shell did not give a revised figure, which now stands at 4,144 barrels.

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China strengthens relationship with Pakistan  

The Chinese government has promised $45.6 billion (29.1 billion pounds) that will be used to finance energy and infrastructure projects in Pakistan.

The China-Pak Economic Corridor (CPEC) project will take place over the next six years. The project is likely to strengthen an already robust relationship between the two states, while also providing a much needed energy source for Pakistan as well as strategic and economic value for China.

“Pakistan and China, both nuclear-armed nations, consider each other close friends. Their ties are underpinned by common wariness of India and a desire to hedge against U.S. influence in South Asia.” - Reuters

Pakistan's minister for water and power Khawaja Asif said "Pakistan will not be taking on any more debt through these projects," China’s banks will be loaning money to Chinese companies to invest in the projects.

China will be developing Gwadar port which is in a strategically important location close to the Strait of Hormuz, a key oil shipping lane that could secure the transportation of oil from the Gulf States, across Pakistan, and into western China. The route will bypass India. Although allies India and China are still economic competitors.

Khawaja Asif  went on to say "In total we will add 16,000 MW of electricity through coal, wind, solar and hydroelectric plants in the next seven years and reduce power shortage by 4,000 to 7,000 megawatts," 

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Fall in crude prices may push Russia into a recession

Russia's ruble currency has hit yet another record low on the back of plummeting oil prices. The price of crude oil has fallen 15% in the past three months and is at its lowest in four years. Higher output coupled with weaker demand from China and Europe has driven the price of crude down to $85. The US also now produces 65% more oil than it did five years ago following the increase in shale production. Russia obtains more than half its budget revenue from oil and gas, making its economy vulnerable to oil price changes.

On Wednesday Russia's central bank announced that it would sell $50 billion in foreign currency auctions, this move would help the banking sector pay back its dollar and euro debts and try to ease the ruble's volatility. The central bank has already spent almost $7 billion this month propping up the ruble.

Timur Nigmatullin, a macroeconomic analyst at Investcafe, argued that relatively high oil prices in the first half of the year, when prices were above $100 a barrel, would compensate for the lower prices now. Nigmatullin believes that the government would seek to mitigate the country’s worsening economic situation by borrowing, reducing expenditures and spending money from the reserve fund built up when oil prices were higher. But all these have negative effects, notably rising debt servicing costs and reduced popularity for the government, he said.

Economists have warned that if the oil price does not improve, Russia could face a recession in 2016 or even earlier. Russian recession may impact Putin’s popularity with the country’s business elite. Konstantin Sonin, a professor at the Higher School of Economics, said the falling oil price would lead to spending cuts that could set off alarm bells among business leaders. "The elite is now realizing what these achievements cost," Sonin said, referring to Putin's annexation of Crimea and support for the separatist state in eastern Ukraine.