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Nigeria attack stops Shell’s Bonga offshore oil: U.S. Captain kidnapped

Reuters

Nigeria attack stops Shell’s Bonga offshore oil

Thu Jun 19, 2008 7:56am EDT

(Adds U.S. captain kidnapped)

By Nick Tattersall

ABUJA, June 19 (Reuters) – Gunmen in speedboats attacked Royal Dutch Shell’s (RDSa.L: QuoteProfileResearchStock Buzz) Bonga oilfield off the coast of Nigeria on Thursday, shutting down a tenth of the country’s oil output in a rare attack on a deepwater facility.

The strike on a key floating production storage and offloading vessel some 120 km (75 miles) off the Nigerian coast caused the Anglo-Dutch giant to stop output from Bonga, which has a nameplate capacity of 220,000 barrels per day.

After the attack, the gunmen came across a separate oil supply vessel and kidnapped its U.S. captain in an apparent opportunistic attack, navy spokesman Henry Babalola said.

A private security contractor working in the oil industry said the kidnapping took place off Escravos, where U.S. energy giant Chevron (CVX.N: QuoteProfile,ResearchStock Buzz) has its main export terminal. He said around two dozen gunmen in three speedboats were involved.

Chevron officials were not immediately available to comment.

The bombing of pipelines and kidnapping of foreign oil workers in the world’s eighth biggest oil exporter had already cut production by around a fifth in recent years, helping drive global oil prices to record highs.

But the attacks have mostly been on facilities in the shallow creeks of the Niger Delta, the heartland of the country’s oil industry, and oil companies have been focusing on offshore projects partly in an effort to offset that risk.

“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 early on Thursday morning.

“We have stopped production,” he said.

No group has yet claimed responsibility.

OFFSHORE SECURITY

Fears of supply disruption in Nigeria, home to sub-Saharan Africa’s biggest oil industry, have sent jitters through an already volatile global oil market.

The West African nation is already producing well below its potential, largely due the violent sabotage in the delta.

Pipelines in the region are exposed and often unguarded, making them easy targets for anyone with access to explosives.

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.

Significant attacks on offshore facilities are more complicated to carry out and have been relatively rare but security in the Gulf of Guinea appears to be deteriorating.

Nigerian navy spokesman Babalola said a security vessel had been attacked by armed youths in military fatigues who kidnapped two crew members in another, separate incident on Thursday.

Shell’s Bonga field has helped offset losses from the delta, while Chevron’s (CVX.N:QuoteProfileResearchStock Buzz) Agbami and Total’s (TOTF.PA: Quote,ProfileResearchStock Buzz) Akpo fields are due to come on stream this year.

U.S. crude prices CLc1 rallied to around $137 a barrel on Wednesday, pushed higher by concern that Nigerian workers at Chevron may go on strike as talks with the company’s management over the number of expatriates it employs broke down.

The oil ministry intervened late on Wednesday, saying it had persuaded the firm to reduce its foreign workforce, and talks were set to continue on Thursday.

For a factbox on Nigeria’s lost production double click on [ID:nL19617394] (Editing by William Hardy)
 

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