Sunday, May 30, 2004

Did I Mention the Importance of Aircraft Carriers?

Sun May 30, 5:12 AM ET Add Business - Reuters to My Yahoo!

By Samia Nakhoul

KHOBAR, Saudi Arabia (Reuters)
- Saudi Arabia was tightly guarding its vast energy network, still running as normal after a militant attack in Khobar, as its oil minister planned on Sunday to reassure Western executives over security.

World oil markets have been on edge over the possibility of a militant strike in top crude exporter Saudi Arabia, now pumping more than 9 million barrels daily in a bid to cool scorching prices.

But a purported statement from al Qaeda boasting of a hit on "American companies...specialized in oil" and claiming the attack on the eastern oil city of Khobar will heighten dealers' concern about supply security in the Middle East.

"No Saudi Aramco facilities or personnel were affected by the incidents in al-Khobar on May 29, 2004, and normal operations continue at all of the company's installations," state-run Saudi Aramco said in a statement received by Reuters.

"...the company is committed to carrying out the Saudi Arabian government's policy of providing a reliable supply of oil to meet world energy demand."

Suspected al Qaeda militants killed some hostages after Saudi commandos stormed a building on Sunday to rescue some 50 foreigners in a Khobar housing compound. Hostage-taking is a new twist in the wave of militant violence sweeping the kingdom.

But pledges of secure supplies from oil giant Saudi Aramco might not go far enough to soothe jittery world markets, where prices again were threatening to pierce the $40 a barrel mark. Markets reopen on Tuesday after a long weekend holiday.

"The attack has some shock value for oil prices, but things may calm down again," said Peter Gignoux, senior oil adviser at New York-based GDP (news - web sites) Associates.

"This was a terrible act of terrorism, but it hasn't had any impact on Saudi oil production or exports."


Saudi Oil Minister Ali al-Naimi was due to meet senior Western oil executives later on Sunday at Aramco headquarters in nearby Dhahran to ease their concern over security, a Western industry source said.

The state oil company's "top priority is to ensure the security of its employees, dependants, facilities and communities, by working closely with Saudi government authorities," said the Aramco statement.

The kingdom's well protected energy infrastructure has yet to be struck by militants, but some dealers feared emboldened fighters might shift from soft targets and attack production and export facilities.

Despite the fresh weekend violence, Western oil majors said they were unlikely to pull out of the oil-rich kingdom.

Executives from Royal Dutch/Shell, Total and LUKOIL had lived at the Oasis compound, scene of the hostage ordeal.

"I don't expect a mass exodus, but families will consider leaving," said a Western oil executive.

The Saturday attack in Khobar comes just days ahead of a meeting of the Organization of Petroleum Exporting Countries in Beirut where the cartel is due to consider a big increase in output limits.

Saudi Arabia, the only OPEC (news - web sites) member with any significant immediate spare capacity, has made clear it will pump real extra volumes of some 700,000 bpd, irrespective of quotas.

By Golly, guess who is coming to town in the very near future to secure this area? Could it be the USS THEODORE ROOSEVELT (CVN 71)?
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They are great Roving Platforms for things that Sting like a Bee,

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