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Shell freezes Nigerian oil field after latest attack

Latest update : 2008-06-19

A spokesman for Shell said the Anglo-Dutch oil major had shut down production at a major oil facility in Nigeria following the latest in a series of attacks by local militant groups.

Royal Dutch Shell has stopped production at its Bonga offshore oilfield in Nigeria, which pumps an average of around 220,000 barrels per day, after an attack by gunmen, a spokesman said on Thursday.
The strike on a key floating production storage and offloading vessel some 120 km (75 miles) off the Nigerian coast is a rare departure for oil militants who have generally targeted facilities in the shallow creeks of the Niger Delta.
"It acts as a flow station, as a terminal. It is the heart, the hub of the field," Shell spokesman Precious Okolobo said of the vessel hit in the attack.
"We have stopped production."
Fears of supply disruption in Nigeria, the world's eighth biggest oil exporter, have helped pushed global oil prices to record highs. U.S. crude prices rallied to near $137 a barrel on Wednesday.
A private security contractor working in the oil industry said around two dozen gunmen in three speedboats had attacked the floating facility but failed to get inside it, injuring three Shell staff.
During their escape, the attackers encountered another vessel off the Escravos export terminal and kidnapped its U.S. captain, the contractor said.
Nigerian navy spokesman Henry Babalola said three crew members had been kidnapped in an attack on a vessel near Bonga but had no further details. It was not immediately clear if he was referring to the same incident.
Nigeria is already producing well below its oil potential, largely due to a violent campaign of sabotage by militants in its southern Niger Delta, the heartland of its industry, which has slashed capacity by around a fifth since early 2006.
Pipelines in the delta are exposed and unguarded, making them easy targets for anyone with access to explosives, but significant attacks on offshore facilities are more complicated to carry out and have been relatively rare.
Oil firms have been focusing on offshore projects because of the unrest in the delta.
Shell, the largest operator in the delta, took a $716 million charge last year and warned that it would have to cut operations due to insecurity and lack of state funding.
The Bonga field has helped offset losses from the delta, while Chevron's Agbami and Total's Akpo fields are due to come on stream this year.

Date created : 2008-06-19