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Nigerian militants threaten attack

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Nigerian militants threaten attack

By Matthew Green in Lagos

Published: September 18 2008 02:46 | Last updated: September 18 2008 02:46

Nigerian militants threatened on Wednesday to attack deepwater oil vessels belonging to Royal Dutch Shell and Chevron, raising fears that this week’s upsurge in fighting in the Niger Delta could put multi-billion dollar investments at risk.

The oil-producing region witnessed some of its worst violence in several years after the Movement for the Emancipation of the Niger Delta launched a series of retaliatory attacks following a raid on one its camps by the army on Saturday.

Some security sources have estimated that dozens of people have been killed in the clashes, so far confined to Rivers State in the eastern delta, though precise figures are difficult to obtain from the maze of creeks and mangrove swamps.

Oil prices have fallen sharply this week amid concerns that the turmoil on Wall Street will worsen the global economic slowdown. But the attacks in Nigeria, Africa’s biggest oil exporter, helped to push prices above $94 in early trading on Wednesday.

Nigerian officials say at least 115,000 b/d of Nigeria’s output of approximately 2.1m b/d has been shut-in since the weekend. Militants attacked a Shell flow station in a further attack in Rivers State on Tuesday night.

Oil markets are watching to see whether Mend will be able to spread its operation – which it calls “Hurricane Barbarossa” – beyond Rivers State to the other major oil and gas-producing states of Delta and Bayelsa. A source close to the Rivers State government said there was already evidence to suggest that gunmen from these other areas had crossed into Rivers to support Mend’s campaign.

“We have camps all over the Delta, but will take a systematic approach starting from Rivers to concentrate our forces the same way a hurricane works. It never skips over an area but goes through to the next.” a Mend spokesman said in an email to the Financial Times. “Depending on the situation, we will use every human resource from the jobless to petty criminals. All is fair in war.”

Mend’s threat to target deepwater vessels is of particular concern for Western majors, hoping to make up for slow progress in restoring output lost to attacks in the delta in recent years by bringing giant offshore developments onstream.

Mend dashed hopes that such oilfields would be safe in June by using speedboats to reach Shell’s mammoth Bonga vessel, located 120km offshore. The night raid forced Shell to temporarily shut down the $3.6bn facility, which has peak production of 220,000 b/d.

The Mend spokesman advised oil workers to evacuate both Bonga and Agbami, a similar deepwater field that Chevron began operating in July. The Agbami vessel is expected to start pumping about 100,000 b/d by February out of a peak production of 250,000 b/d. Total hopes to start its deepwater Akpo field, which will be able to pump up to 225,000 b/d, by early next year.


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Copyright The Financial Times Limited 2008

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