Bloomberg: Shell Shuts Some Nigerian Oil Output as Tension Rises (Update1): “Violence in the Niger River delta, where Nigeria's oil is produced, kills about 1,000 people a year, according to a confidential report funded by Shell.” (ShellNews.net)

Sept. 28 (Bloomberg) -- Royal Dutch/Shell Group's Nigerian venture, which pumps almost half the oil in Africa's biggest oil producer, closed an oil-pumping station and reduced the movement of staff after rebels threatened to attack oil installations.

The pumping station usually produces 28,000 barrels a day of oil, said Simon Buerk, a Shell spokesman in London, a small part of Shell's daily output of more than 1 million barrels. Eni SpA and Total SA said their Nigerian oil output is unaffected.

``We're monitoring the situation and taking precautionary measures for the safety of staff,'' Buerk said. ``We've curtailed movement of staff and supplies in this part of the swamps of our eastern area of operations.''

Crude oil reached a record $50.47 a barrel in New York today, partly on concern that fighting in Nigeria, the fifth-largest supplier to the U.S., may reduce supply. Prices are up 54 percent this year because of faster-than-expected growth in demand that has left oil producers with little room to boost production further.

Shell last week used helicopters and boats to evacuate 235 ``non-essential'' personnel at Soku and Ekulama, close to the city of Port Harcourt in the Niger River delta. Buerk said he wasn't aware if more people have been evacuated.

Eni, Total

A spokeswoman for Rome-based Eni, who declined to be identified by name, said the company's Nigerian production is continuing and Eni has no reason to believe its staff or infrastructure are in danger.

No Eni staff have been moved for security reasons, the spokeswoman said.

``In Nigeria, production is not affected,'' Patricia Marie, a Total spokeswoman, said by telephone from the company's Paris headquarters. ``We think we are doing our best to ensure security to personnel, and that is our priority.''

Violence in the Niger River delta, where Nigeria's oil is produced, kills about 1,000 people a year, according to a confidential report funded by Shell. Criminal gangs sell stolen oil to buy weapons, the survey said.

Strikes and violence often disrupt oil output in Nigeria, boosting world prices. In March 2003, Shell, ChevronTexaco Corp. and Total were forced to idle more than a third of Nigeria's output because of violence around the town of Warri.

Shell still has 9,800 barrels a day of production shut down following that disruption, and ChevronTexaco has been unable to restart output of 140,000 barrels a day.

To contact the reporter on this story:

Alex Lawler in London  at alawler@bloomberg.net

To contact the editor on this story:

Tim Coulter at  tcoulter@bloomberg.net

Last Updated: September 28, 2004 07:23 EDT 

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