Reuters: Shell considers Nigerian area pullout – source: “Royal Dutch Shell is considering a total staff pullout from the west of Nigeria's delta region on Monday due to militant attacks, a senior industry source said, threatening more supply cuts from the leading OPEC oil exporter.”: Monday 16 January 2006

By Tom Ashby

LAGOS, Jan 16 (Reuters) - Royal Dutch Shell is considering a total staff pullout from the west of Nigeria's delta region on Monday due to militant attacks, a senior industry source said, threatening more supply cuts from the leading OPEC oil exporter.

Heavily armed militants from the Ijaw ethnic group killed six people in a raid on a Shell (RDSa.L: Quote, Profile, Research) platform on Sunday, the fourth attack in five days, prompting the firm to withdraw 330 workers from oil flow stations in remote Niger Delta swamps.

The militant Movement for the Emancipation of the Niger Delta, also believed to be behind the kidnapping of four foreign oil workers, said in an email to Reuters it had 5,000 fighters and vowed to cripple the world's eighth largest oil exporter.

The possibility of a major Shell staff pullout will increase pressure on President Olusegun Obasanjo's government to crack down on the militants, who are demanding more control over the region's oil revenues and the release of two Ijaw leaders.

Shell is the largest oil producer in Nigeria, widely known to be key to U.S. hopes of reducing dependence on supplies from the volatile Gulf. A major staff pullout is likely to trigger more output cuts in the country, already hit by the attacks.

"I think (Shell will) have to evacuate the whole of the swamps around (the city of) Warri," the industry source told Reuters, adding a final decision would be made on Monday.

No comment was immediately available from Shell, which normally pumps 380,000 barrels a day from the Warri region -- three-quarters of it from the swamps.

POVERTY AND OIL

Violence against oil workers is frequent in the Niger Delta, which accounts for almost half of Nigeria's 2.4 million barrels a day production and where an estimated 20 million people live in poverty alongside a multi-billion-dollar industry.

Thousands of troops have been stationed in the vast delta since 2003 when Ijaw militancy befere national elections forced companies to shut 40 percent of Nigeria's output.

The evacuation of the 330 workers on Sunday had no impact on output because the flow stations were already closed after the militants bombed a nearby major crude oil pipeline last week. But it will delay repairs to the pipeline.

Multinational oil companies might consider more drastic withdrawals of workers from across the whole of the Niger Delta swamps if the attacks go on, said the source, asking not to be identified.

"At some stage we might have to pull out (of all Niger Delta swamps) until the government can sort it out," he said, adding production would be shut down under a worst case scenario.

The four kidnapped foreign oil workers -- an American, Briton, Bulgarian and Honduran -- were seized from an offshore oilfield operated by Shell last Wednesday.

"The leverage (the militants) have is the fact they have hostages. Without that, the military would have come in heavily," said the source.

While Shell and other Western multinationals are leaving workers in the eastern delta swamps for now, the militants have shown they can attack in those areas too.

They bombed a major export pipeline in the east of the delta on Dec. 20, killing 11 people and causing a massive fire.

Ruled by military dictators for most of its history since independence from Britain in 1960, Nigeria returned to civilian government in 1999 but rigging, organised thuggery and assassinations remain a feature of political life.

The latest attacks in the delta have coincided with heightened political tension in Nigeria as a whole, and the region in particular.

Powerful figures in Obasanjo's People's Democratic Party are jostling for position before national elections in 2007, and the rivalry has turned bloody in some cases.

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