Global Processing

Oil company cuts production in Nigeria following attack

April 21, 2008
According to the Associated Press, Royal Dutch Shell will cut oil production by 169,000 barrel per day in Nigeria after militants attacked two pipelines recently in the restive southern region.

The Nigerian attack, and a missile attack recently on Japanese oil tanker off the east coast of Yemen, sent oil prices spiking to a record 117.40 a barrel.

The Movement for the Emancipation of the Niger Delta, or MEND, said in a statement that fighters hit two pipelines it believes to be a joint venture between Royal Dutch Shell PLC and Chevron Corp. in southern Rivers state.

The group also called for former President Jimmy Carter to help mediate an end to the crisis.

Shell officials had no immediate information on any attack and the Nigerian military battle group that patrols the oil region''s waterways said it had no reports of overnight violence. Officials from Chevron could not immediately be reached for comment.

The militants last week claimed a separate attack on a pipeline operated by a Shell joint venture that the company said shut down a small amount of oil production.

The militants say they are stepping up their activities after the arrest of one of their leaders, Henry Okah, who is on trial for terrorism and treason.

The militants also called for mediation by Carter with the aim of ending the long-running crisis that government-led peace parleys have so far failed to control. The militants have also asked President Bush and actor George Clooney for their involvement, but said they have received no reply.

The militant group emerged in early 2006, launching bombing attacks on Nigeria''s oil infrastructure that cut about one quarter of the usual oil output in Africa''s biggest crude producer. That has helped send oil prices to all-time highs.

The militants want the release of their leaders from prison, and for more oil industry revenue for their areas, which remain deeply poor despite the natural bounty.

But crime and militancy are closely interwoven in the southern Niger Delta where the crude is pumped. Many of the various armed groups in the region have had links to local politicians, who helped arm and direct the gunmen in their efforts to rig elections.

Both militants and government officials are suspected of heavy involvement in the theft and resale of crude oil, which oil industry officials brings revenues that run into the millions of dollars per day.

Nigeria''s vast network of oil pipelines crisscross the swamps and creeks in the Niger Delta and are easily sabotaged. But the militants haven''t recently shown the sophisticated, military-style raids on staffed oil infrastructure that made them the most potent-ever militant group in southern Nigeria.

The militants'' activities appear to have moved further into the propaganda realm, with demands on international figures linked to external news events. Carter was in the Middle East recently.