Chevron’s Nigerian unit yet to resume production after attack

Chevron’s Nigerian unit yet to resume production after attack
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First Published: Sun, Jun 22 2008. 10 38 PM IST
Updated: Sun, Jun 22 2008. 10 38 PM IST
Johannesburg: Chevron Corp.’s Nigerian unit has yet to resume production following an attack on a pipeline operated by the company, said H. Odein Ajumogobia, minister of state for petroleum in the country.
Chevron Nigeria’s Abiteye-Olero pipeline was “breached” on 19 June in a suspected act of sabotage, the San Ramon, California-based company said on Saturday.
About 120,000 barrels a day of crude have been halted by the attack. That equates to about 6% of the nation’s daily output, according to Bloomberg calculations.
Nigeria, Africa’s second biggest oil producer, after Angola, is currently producing 1.8 million barrels a day, Ajumogobia told reporters on Sunday in Jeddah, Saudi Arabia.
Rebels in the Niger Delta, which produces all of the nation’s oil, are sabotaging the industry’s infrastructure to press their demand for a greater share of the area’s oil wealth and more political power.
Royal Dutch Shell Plc. said on 19 June it shut down the Bonga oil field in Nigeria because of militant action, halting shipments as much of 190,000 barrels a day.
Chevron’s Nigerian unit halted production after one of its pipelines in Delta state was “breached”.
A militant group said the attack was carried out by “patriotic youths”.
“Onshore production has been shut in order to protect the environment,” Kurt Glaubitz, a spokesman for Chevron, said in a phone interview from San Ramon.
“We’re hopeful that production can be restored as soon as possible.”
He declined to say how much output was affected.
The Movement for the Emancipation of the Niger Delta, a rebel group known as MEND, said the Chevron pipeline, known as Abiteye-Olero, was attacked by “angry youths who we are now empowering with more powerful explosives and new techniques to destroy additional pipelines”.
Repeated disruptions in Nigeria have been a factor in the near doubling of crude prices in the last year.
Crude oil for July delivery rose $2.69, or 2%, to $134.62 a barrel on the New York Mercantile Exchange on 20 June. Futures climbed to a record $139.89 on 16 June.
The government should free MEND leader Henry Okah, in order for the attacks to be halted “before Nigeria’s oil export reaches zero”, Jomo Gbomo, a MEND spokesman said in a statement by the group.
The movement has made the release of Okah, who is facing a secret trial in the northern city of Jos for treason and weapons-smuggling, a condition for suspending their activities.
After MEND’s attack on Shell’s facilities on 19 June, Nigerian President Umaru Yar’Adua ordered security for oil installations in the Delta to be “beefed up” and said militants must be prepared to face the consequences.
“Yar’Adua should not be deceived by the criminals within the Armed Forces who are pushing him to enter into a fight for their own selfish interest as we don’t see how the military can emerge victorious in guerrilla warfare,” Gbomo said.
Segun Adeniyi, a spokesman for Yar’Adua, declined to comment on the Chevron incident when contacted today in the national capital, Abuja.
Bloomberg
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First Published: Sun, Jun 22 2008. 10 38 PM IST