Nigeria suspends 380,000 bpd oil exports after tanker loading platform attacked

2/18/06 Agence Fr.-Presse 09:40:00



AGENCE FRANCE PRESSE ENGLISH WIRE
Copyright 2006 Agence France-Presse


February 18, 2006


Nine foreign oil workers kidnapped in Niger Delta


LAGOS, Feb 18, 2006 (AFP) - Nine foreigners working for the oil giant Shell were kidnapped by armed militants Saturday from a barge in the Niger Delta, a company source said.

A company manager, who asked not to be identified, told AFP that guerrillas had attacked a pipelaying boat off the Forcados oil terminal at around 5:00 am (O400 GMT) and had taken the men hostage.

They also attacked and damaged part of the oil terminal and clashed with Nigerian soldiers, the source said.

Meanwhile, an emailed statement from ethnic Ijaw militants said they had launched a campaign against the government and the oil industry in reposnse to two air strikes against them in the past week.

"As a result of attacks against Ijaw communities in Delta State, we decided in response to pleas from our kin in these communities, to carry out strikes against oil and gas facilities in Delta state," it said.

"Workers in the oil industry are hereby requested to vacate all installations with immediate effect," it added.

"All pipelines, flow stations and crude loading platforms will be targeted for destruction within the next few hours by our units," it warned.

The statement was sent before the Forcados attack took place, and did not mention it, but it said that a gas pipeline belonging to the Nigerian government had been blown up.

Henry Imhanlenjaye, a boat captain from the nearby port city of Warri, told AFP by telephone that gunfire had been heard around the Foracdos terminal and that an explosion had rocked the creeks.

A Nigerian military spokesman refused to comment on the incident.

The nationalisty of the captured workers was not immediately clear. They were worrking with Nigerian colleagues on a barge belonging to the US engineering firm Willbros, a Shell subcontractors, the company source said.

Last month, ethnic Ijaw militants blew up an oil pipeline, kidnapped four Western oil contractors and held them for 19 days and attacked several oil facilities, killing a total of 22 soldiers and police and three workers.

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Nigeria Militants Take Hostages, Attack Oil Terminal (Update6)

Feb. 18 (Bloomberg) -- Nigerian militants took nine foreign hostages and attacked two pipelines and Royal Dutch Shell Plc's Forcados offshore oil export terminal today in retaliation for raids by government military forces.

Willbros Group Inc. said the hostages were taken from a boat that was on contract for Shell, Nigeria's top international oil producer. The attacks sparked a fire at the Forcados terminal, which has a capacity of 400,000 barrels a day, and an explosion at the Chanomi pipeline, Shell spokesman Don Boham said.

``It could be that it shuts down all of Shell's onshore operations in Nigeria,'' Simon Wardell, an analyst in London at Global Insight, said in an interview today. ``The markets are going to discount Nigerian production in the price of oil.''

Shell's venture has halted the flow of 106,000 barrels a day, or about 5 percent of the country's total output, through the Forcados terminal since a Jan. 11 attack by the militants on the Trans-Ramos pipeline. The militants have vowed to launch attacks to cut the export capacity of Nigeria, Africa's top oil producer, by 30 percent in February.

The militants said they targeted Shell today because Nigerian military helicopters had used an airstrip operated by the company to attack villagers in the Niger River delta.

``Insurgents of all kinds are attacking the oil industry as a way of fighting the governments in charge,'' said Youssef Ibrahim, managing director of Dubai, United Arab Emirates-based Strategic Energy Investment Group. ``It's contributing to a lot of anxiety about the safety of supply.''

Crude Price Surge

Crude oil prices surged yesterday after the British Broadcasting Corp. said the militants declared ``total war'' on oil companies. Crude oil for March delivery rose $1.42, or 2.4 percent, to close at $59.88 a barrel on the New York Mercantile Exchange. Gasoline jumped more than 6 percent, the biggest gain in five months.

Nigeria produces low-sulfur, or sweet, oil that's easy to process into high-value fuels such as gasoline and diesel. The U.S. received an average 1.1 million barrels of crude oil a day from the West African country last year, making it the fifth-biggest source of imports, according to the Energy Department.

The fire on the Forcados export terminal was put out and ``we are investigating the cause and the damage,'' Caroline Wittgen, a Shell spokesman in London, said.

Loading Platform

Reuters, citing an unidentified oil industry official, said Shell had suspended loadings at the export terminal after the militants bombed the tanker loading platform.

Among those kidnapped are three U.S. citizens, one from the U.K., two from Egypt, two from Thailand, and one from the Philippines, the militants said in an e-mailed statement. They said they killed five government soldiers in today's attacks.

The hostages are all Willbros personnel, a company spokesman in Houston, Michael Collier, said in a telephone interview. Willbros has put together a crisis management team is trying to contact their families.

The kidnappers didn't take the vessel and left some personnel on board, Collier said.

``That the Nigerian military has been preparing for weeks only for their incompetence to be revealed in mere minutes is enough warning to oil companies and their workers that they stand no chance against any of our units in the event of an attack,'' Jomo Gbomo, a self-described spokesman for the militants, said in a statement.

Earlier Kidnapping

Last month, the militants kidnapped four oil workers from a Tidewater Inc. supply boat near the EA offshore field run by the Shell venture and held them for 19 days. They were released unharmed.

The militants said they attacked the pipeline at Escravos at 3:25 a.m. local time today. The state-owned pipeline feeds petroleum products to the northern city of Kaduna, the statement said.

Communities in the Niger delta, a maze of creeks and rivers feeding into one of the world's biggest remaining areas of mangroves, are among Nigeria's poorest, a Shell-funded report on the area said in 2004. It cited studies showing per-capita income in the region to be below the national average of $260. Unemployment surpasses 90 percent in some areas.

``All pipelines, flow stations and crude loading platforms will be targeted for destruction within the next few hours by our units,'' Gbomo said. ``This impromptu action is a direct consequence of the helicopter attacks on several communities in the region that has led to death and injury of numerous civilians.''

Raids

The militant group, which calls itself Movement for the Emancipation of the Niger Delta, or MEND, said its attacks today were a response to raids by Nigerian military helicopters this week on the Gbaramatu area of Delta state. It said its forces would target all helicopters in the Niger delta and warned foreigners to leave the region. Today MEND warned foreign oil workers to leave the region immediately.

The militants say their aim is to win control of Nigeria's oil riches for the people of the Niger delta. Nigeria was the sixth- biggest producer in the Organization of Petroleum Exporting Nations last month, according to Bloomberg data.

MEND is also demanding that the Nigerian government release Diepreye Alamieyeseigha, the former governor of Bayelsa state, who was impeached and arrested on money laundering charges, and Mujahid Dokubo Asari, a militia leader who is in jail on treason charges.

Military Helicopters

Military helicopters departing from the Osubi airstrip operated by a Shell venture attacked suspected oil smugglers in the Gbaramatu area near Warri on Feb. 15, killing as many as 20 people, Lagos-based ThisDay newspaper reported yesterday.

When a helicopter resumed attacking the Gbaramatu area yesterday, militants fired on it, MEND said. That attack was confirmed by Nigerian military spokesman Major Said Hammed.

``Shell employees will pay a terrible price for the use of Shell facilities in the attack of communities in the Niger delta,'' Gbomo said in the MEND statement.

The U.S. State Department yesterday issued a travel warning, saying security has ``deteriorated significantly'' in the Niger delta.




To contact the reporter on this story:
Karl Maier in Khartoum at kmaier2@bloomberg.net
Julie Ziegler in Abuja at jziegler@bloomberg.net

Last Updated: February 18, 2006 11:23 EST

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Shell Says It's Shutting Down, Evacuating EA Field in Nigeria

Feb. 18 (Bloomberg) -- Royal Dutch Shell Plc's venture in Nigeria said it's evacuating and shutting down its EA offshore field following today's militant attacks and hostage taking, cutting production by 115,000 barrels a day.

Shell made the decision to close the field as ``a precautionary measure in light of recent events in the Niger Delta region,'' the company said today in an e-mailed statement from Lagos.

Nigerian militants earlier today took nine foreign hostages and attacked two pipelines and Shell's Forcados offshore oil export terminal in retaliation for raids by government military forces.

Willbros Group Inc. said the hostages were taken from a boat that was contracted by Shell, which pumps about half of Nigeria's oil output. The attacks sparked a fire at the Forcados terminal, which has a capacity of 400,000 barrels a day, and an explosion at the Chanomi pipeline, Shell spokesman Don Boham said.

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February 17, 2006

This Travel Warning is being re-issued to note the deteriorating security situation in the Niger Delta region. It supersedes the Travel Warning for Nigeria issued January 20, 2006.

The Department of State continues to warn U.S. citizens of the dangers of travel to Nigeria. The lack of law and order in Nigeria poses considerable risks to travelers. Violent crime committed by ordinary criminals, as well as by persons in police and military uniforms, can occur throughout the country.

The security situation in the Delta region has deteriorated significantly. Travel to the region remains very dangerous and should be avoided. On January 11, 2006, one American and three other expatriates aboard an oilfield service vessel were kidnapped off the coast of Bayelsa State. Over the last several months, the region has been subjected to a series of attacks on oil company facilities that may be coordinated and have resulted in the death of over twenty security personnel. A militant group claiming responsibility for the recent kidnapping has made public threats against oil company employees and their families, demanding they leave the region.

In recent months, Lagos and Abuja have also witnessed spikes in crime. Some expatriates have been robbed in the outlying Lagos suburb of Lekki, and in Abuja, the Maitama area has seen a series of home invasions. In a working class section of mainland Lagos, an October 2005 clash between police and residents left several dead. Even Victoria and Ikoyi Islands, which are generally safer than other parts of Lagos, have experienced attempted bank robberies, and have seen an increase in smash-and-grab car robberies, including some involving expatriates.

Religious tension between some Muslim and Christian communities results in occasional acts of isolated communal violence that could erupt quickly and without warning. The states of Kano and Kaduna are particularly volatile. Rival ethnic groups have clashed violently in the Niger Delta region around Warri city and in Southeast Plateau State. Senior al-Qaida leadership has expressed interest publicly in overthrowing the government of Nigeria. Links also were uncovered connecting Nigerians to al-Qaida in 2004.

Road travel is dangerous. Robberies by armed gangs have been reported on rural roads and within major cities. Travelers should avoid driving at night. Because of poor vehicle maintenance and driving conditions, public transportation throughout Nigeria can be dangerous and should be avoided. Taxis pose risks because of the possibility of fraudulent or criminal operators, old and unsafe vehicles, and poorly maintained roads. Road travel in Lagos is banned between 7:00 and 10:00 AM on the last Saturday of every month for municipal road cleanup; police vigilantly enforce the ban.

Most Nigerian airlines have aging fleets, and maintenance and operational procedures may be inadequate to ensure passenger safety. Domestic passenger airliner crashes in October and December 2005 resulted in numerous deaths. Because international flights tend to meet higher safety standards than domestic Nigerian flights, travelers should attempt to get direct international flights to/from their Nigerian destination, rather than transiting another Nigerian city such as Lagos. For domestic travel between Lagos, Port Harcourt and Abuja, the U.S. Government encourages its employees to use Virgin Nigeria Airlines or Aero Contractors.

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Shell Closes Oil Field After Militants Take Hostages (Update2)
Feb. 18 (Bloomberg) -- Royal Dutch Shell Plc's venture in Nigeria shut down an offshore field and halted loading from an export terminal after militants took nine foreigners hostage and attacked oil facilities in the Niger Delta.

Shell closed the EA field as ``a precautionary measure in light of recent events in the Niger Delta region,'' spokeswoman Caroline Wittgen said by telephone from London. The field accounts for 115,000 barrels a day, or a tenth of Shell's daily production in Nigeria.

The hostages, employees of Willbros Group Inc., were taken from a boat that was under contract by Shell, Willbros said in a statement.

``It could be that it shuts down all of Shell's onshore operations in Nigeria,'' said Simon Wardell, an analyst in London at Global Insight, in an interview today. ``The markets are going to discount Nigerian production in the price of oil.'' Shell accounts for about half of Nigeria's daily production.

Shell also stopped loadings from the Forcados terminal, which has capacity of 400,000 barrels a day. No loadings were scheduled this weekend, Wittgen said.

Shell's venture last month halted the flow of 106,000 barrels a day, or about 5 percent of the country's total output, through the Forcados terminal after a Jan. 11 attack by the militants on the Trans-Ramos pipeline. The militants vowed to launch attacks to cut the export capacity of Nigeria, Africa's top oil producer, by 30 percent in February.

Speedy Release

Among those kidnapped are three U.S. citizens, one from the U.K., two from Egypt, two from Thailand, and one from the Philippines, Willbros said in a statement. The militants' statement identified the British citizen as John Hudspith, a name which the U.K. Foreign Office in London confirmed.

Nigeria President Olusegun Obasanjo's office issued a statement condemning the kidnappers and saying ``everything is already being done to secure the speedy release of the hostages through dialogue.'' A committee is being set up to work toward the release, the statement said.

Willbros also said it was working on the hostages' release.

Exxon Mobil Corp., the second-biggest oil producer in Nigeria, hasn't reduced operations in the country following today's attacks, spokeswoman Susan Reeves said in a telephone interview from Houston.

Chevron Will Stay

Exxon Mobil's daily production in Nigeria is 650,000 barrels of oil per day, she said.

Chevron Corp., third-biggest producer, said the company has no plans to evacuate staff from the Niger Delta.

``Most people are just evaluating what's going on,'' said Chevron spokesman Femi Odumabo, in a telephone interview from Lagos.

The militants said today that they may also target Eni SpA's Agip unit in Nigeria.

``Shell is not alone in the disregard of host communities,'' Jomo Gbomo, a self-described spokesman for the militants, said in a response to e-mail questions. ``Agip was also ordered to pay compensation in Delta state for spillages and has refused to do so. We will attend to that in due course.''

The militants said they targeted Shell today because Nigerian military helicopters had used an airstrip operated by the company to attack villagers in the Niger River Delta.

``There is great anger this time owing to the loss of lives in communities attacked by the choppers,'' Gbomo said. ``We have very little regard for the lives of these hostages as we have lost a number of civilians in these raids.''

`Bigger Than Just Shell'

Nigerian Information Minister Frank Nweke, in an e-mail statement, said no military attack on villagers took place. The military on Feb. 16 ``took action to demobilize five oil barges which it had good reason to believe were used for stealing crude oil,'' Nweke said.

``This is bigger than just Shell,'' said Antony Goldman, a risk analyst at London-based Clearwater Research Services, in a telephone interview from Sao Tome. ``The challenge for the Nigerian government and the military is to bring this under control without making the situation worse.''

Crude oil prices surged yesterday after the British Broadcasting Corp. said the militants declared ``total war'' on oil companies. Crude oil for March delivery rose $1.42, or 2.4 percent, to close at $59.88 a barrel on the New York Mercantile Exchange. Gasoline jumped more than 6 percent, the biggest gain in five months.

Incompetence

Nigeria produces low-sulfur, or sweet, oil that's easy to process into high-value fuels such as gasoline and diesel. The U.S. received an average 1.1 million barrels of crude oil a day from the West African country last year, making it the fifth- biggest source of imports, according to the Energy Department.

``That the Nigerian military has been preparing for weeks only for their incompetence to be revealed in mere minutes is enough warning to oil companies and their workers that they stand no chance against any of our units in the event of an attack,'' Gbomo said.

Last month, the militants kidnapped four oil workers from a Tidewater Inc. supply boat near the EA offshore field run by the Shell venture and held them for 19 days. They were released unharmed.

The militants also said they attacked a state-owned pipeline at Escravos at 3:25 a.m. local time today. The pipeline feeds petroleum products to the northern city of Kaduna, the statement said.

Communities in the Niger Delta, a maze of creeks and rivers feeding into one of the world's biggest remaining areas of mangroves, are among Nigeria's poorest, a Shell-funded report on the area said in 2004. It cited studies showing per-capita income in the region to be below the national average of $260. Unemployment surpasses 90 percent in some areas.

``All pipelines, flow stations and crude loading platforms will be targeted for destruction within the next few hours by our units,'' Gbomo said. ``This impromptu action is a direct consequence of the helicopter attacks on several communities in the region that has led to death and injury of numerous civilians.''

Win Control

The militant group, which calls itself Movement for the Emancipation of the Niger Delta, or MEND, said its attacks today were a response to raids by Nigerian military helicopters this week on the Gbaramatu area of Delta state. It said its forces would target all helicopters in the Niger Delta and warned foreigners to leave the region.

Today, MEND warned foreign oil workers to leave the region immediately.

The militants say their aim is to win control of Nigeria's oil riches for the people of the Niger Delta. Nigeria produced 2.36 million barrels of oil a day last month, making it the sixth-biggest producer in the Organization of Petroleum Exporting Nations last month, according to Bloomberg data.

MEND is also demanding that the Nigerian government release Diepreye Alamieyeseigha, the former governor of Bayelsa state, who was impeached and arrested on money laundering charges, and Mujahid Dokubo Asari, a militia leader who is in jail on treason charges.

The U.S. State Department yesterday issued a travel warning, saying security has ``deteriorated significantly'' in the Niger delta.

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Nigerian militants strike oil targets again
Group boasts attack on pipeline, after having shuttered nearly one-fifth of country's oil output; Brent crude prices surge on news.
February 20, 2006: 8:53 AM EST


LAGOS (Reuters) - Nigerian militants said they blew up a military houseboat and an oil pipeline on Monday, extending a campaign of sabotage in the world's eighth largest exporter which has already cut supplies by a fifth.

The militants, who are holding nine foreign hostages, vowed to prevent Royal Dutch Shell from using the damaged Forcados tanker loading platform, which accounts for 15 percent of Nigerian output, and threatened an even more devastating series of attacks on the whole region.


"Patrol units ... carried out attacks on one houseboat belonging to the Nigerian army and the Shell Ughelli Odidi-Escravos manifold. Both were destroyed with explosives," the Movement for the Emancipation of the Niger Delta said by e-mail.

The group added that soldiers on the houseboat fled before it was destroyed.

It was not immediately possible to confirm the information independently, but the militants have provided accurate details of their attacks in the past.

Shell said it had suspended 455,000 barrels a day of oil production, 19 percent of the OPEC member's output, after a string of pre-dawn raids on installations in Delta state, on the western side of the vast wetlands region, on Saturday.

"We are going to continue with the destruction of oil facilities in Delta state while concluding arrangements for our wider attacks on the entire region," the militants said.

Shell closed 340,000 barrels a day of production from fields feeding its Forcados tanker platform, which was bombed on Saturday, and halted another 115,000 barrels daily by closing the offshore EA field as a precaution.

The Forcados closure includes 106,000 barrels a day from a pipeline which has been shut since an earlier attack in January.

Oil prices jump
North Sea Brent crude oil futures rose $1.51 to $61.40 a barrel on Monday in response to the attacks.

Shell said it was waiting for the security situation to improve before trying to repair the Forcados platform, and militants vowed to attack any vessel that tried to use it.

Shell said it was evacuating staff from remote locations in the eastern delta as a precaution, although its output of 390,000 barrels a day in that region was not affected.

The militants snatched the hostages -- three Americans, a Briton, two Egyptians, two Thais and one Filipino -- from a barge operated by U.S. services company Willbros (Research).

The military-style raids were a mirror image of attacks in December and January which hit 10 percent of Nigerian exports at one point and saw four oil workers kidnapped for 19 days.

The government says the militant movement is a cover for thieves siphoning crude oil on a commercial scale from pipelines across the delta in southern Nigeria.

The militants accused Nigerian military and security commanders in the area of being responsible for the theft.

"Oil is not like diamonds and requires ships to come in unhindered. This is facilitated by the heads of these security organizations who are paid a standard fee for every vessel loaded," they said.

The militants have demanded the release of two ethnic leaders -- an impeached state governor on trial for money laundering and a militia leader charged with treason -- and more local control over the Niger Delta's vast oil resources.

Analysts at Eurasia Group said the markets should expect a prolonged period of disruptions in Nigeria this year, as tension between rival factions of the ruling party mounts towards elections in early 2007.

"The security situation in the Niger Delta will remain largely unstable for the rest of the year, with intermittent attacks, regularly disrupting about 10 to 20 percent of Nigerian crude production," they said in a report on Sunday.

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bobby.knight said:

This is only the beginning wait until it occurs in the middle east.

Bobby.Knight NBC

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