Royal
Dutch Shell has shut down a tenth of Nigeria’s oil production, after
armed militants kidnapped four expatriate oil workers and unknown
assailants vandalised a major pipeline on Wednesday.
The incidents followed attacks on pipelines owned by the Nigerian state-owned oil company in December, which disrupted supplies from the world’s eighth-largest oil exporter for several days. Shell officials confirmed that four expatriate contract workers, including an American and a Briton, had been seized on Wednesday by armed militants who boarded a support vessel off Shell’s offshore EA field.
Shell said on Thursday it had halted the 120,000 barrel per day production from the field as a precaution and had also shut four nearby flow stations after a pipeline was vandalised, cutting exports by another 106,000 b/d.
The Shell Petroleum Development Company – a joint venture with the Nigerian National Petroleum Corporation, of which Shell owns 30 per cent – produced around 1m b/d last year.
ExxonMobil said on Thursday that there had been an unspecified “incident” at one of its oil installations that had briefly interrupted operations. However, it added that production was back to normal.
Industry officials say the arrest of Mujahid Dokubo-Asari – a militant leader in the oil-producing Niger Delta who threatened all-out war on Nigeria’s oil industry in 2004 – as well as the arrest of a local state governor on charges of money laundering have stoked fears of possible attacks on oil facilities.
Many of the delta’s majority tribe, the Ijaw, believe they have been cheated out of Nigeria’s oil wealth. Industry executives differed on whether they suspected Wednesday’s attacks to be co-ordinated.
President Olusegun Obasanjo has nonetheless put Nigeria’s security forces on high alert in the delta’s creeks, where several armed gangs engage in the theft of crude oil from pipelines and oil wells and use the proceeds to build up sophisticated arsenals.
Many of the gangs are backed by political figures in the delta, who are vying for influence ahead of national elections in 2007.
Industry officials claim the theft of oil has fallen from a high of 100,000 b/d to close to 20,000 b/d. Only two weeks ago, the navy killed 12 suspected oil thieves in a gun battle in the delta.
Shell, which has been involved in disputes between militants in the EA area before, said on Thursday night it was working for the release of the four hostages. Kidnappings of oil workers in the delta are frequent and often settled by cash payments.
Wednesday’s attacks overshadowed the public release by Nigeria – an Opec member – of the first part of its first public audit on the oil industry, envisioned as the first step to bringing transparency to the country’s murky oil sector.
Shell has been greatly concerned by the upsurge in violence in Nigeria, which accounts for around a tenth of its global production.
At a presentation in London in October, a senior Shell security official said the government was struggling to keep control over the situation in the Niger Delta.
He said that between 50 and 70 Shell employees had been kidnapped over the past year and an estimated $1bn (€831m, £568m) a year of oil revenues diverted to rebels or corrupt officials.
The report by the Shell official, who did not realise it would be made public, is understood to have caused serious tensions between Nigeria and the oil company.