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Chevron Corporation: Another Day, Another Attack In Nigeria

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Shell, ConocoPhillips and Total are also considering to divest their assets in the Niger Delta.

By Micheal Kaufman: Jun 1, 2016

Operations of international oil & gas companies seem to be in a lot of trouble in Nigeria as militant activities have accelerated in the past few weeks. The militant group, Niger Delta Avengers, has again targeted a Chevron Corporation (NYSE:CVX) facility today, pressurizing it to leave the impoverished area. This is the fourth attack on a Chevron facility in Africa’s biggest economy.

The militant group said on Twitter that it blew up the energy company’s RMP 23 and RMP 24 crude oil wells in the Niger Delta at 3:44 AM. According to the Niger Delta Avengers, these two wells are Chevron’s largest oil producing wells.

According to news sources, the company and military staff have also confirmed these attacks. The blasts have led to the heavy oil spill in the area, forcing a shut down of production facilities. Chevron is currently assessing the level of oil spillage in the region and is trying to prevent it from spreading.

The Niger Delta Avengers has said that even with “the heavy presence of 100 Gunboats, 4 Warships and Jet Bombers,” the military was not able to stop them. The attacks show the group’s determination to prevent international energy companies from operating in the Niger Delta. Despite massive military build-up in the region, terrorists have warned oil companies of further attacks if production facilities do not halt operations.

The group wants energy companies to end pollution in the area and to give a greater share of revenue from crude oil to the locals. Nigeria generates around 70% of its income from crude oil sale; however, locals only receive a small proportion of revenue that oil companies make in the country.

The Niger Delta Avengers has alleged that the government has formed an alliance with foreign companies and ignores locals. The group also pointed out while people in the southern Niger Delta do not have access to even basic necessities, oil companies have not faced electricity outages for the past 40 years.

The militant group has set May 31 as a deadline for oil companies to vacate the area. It has bombed Chevron’s oil and gas facilities four times this year and has attacked Shell’s productions sites twice.

Chevron Attack Not the First Time

Last week, the Niger Delta Avengers blew up the main electricity feed pipeline at Chevron’s Escravos tank farm. The group said that it had warned the company of not carrying out repairs at the Okan oil platform, but as the energy giant did not follow through, they attacked its other facility.

Last month, the militants attacked the Okan platform, used by Chevron and Nigerian National Petroleum Corp. Following the blast, the group threatened the company against restarting the facility until their demands are met. When Chevron tried to resume operations, the group attacked again.

Chevron Not Alone in Being Targeted

Recent attacks in the country have forced Chevron to shut down its facilities. Meanwhile, other energy companies are also planning to end operations in the region. Shell, ConocoPhillips (NYSE:COP), and Total are also considering to divest their assets in the Niger Delta.

Earlier this year, the militant group attacked Royal Dutch Shell plc’s (ADR) (NYSE:RDS.A) Forcados crude oil export terminal and Eja oilfield facility. Following the attacks, the Anglo-Dutch oil giant closed its facilities for some time.

What is the Nigerian Government up to?

The attacks are coming at a time when the Nigerian economy is already suffering from low oil and gas prices. Oil production has dropped to a 20-year low. The country’s President, Muhammadu Buhari, is scheduled to visit the Niger Delta tomorrow, where he is expected to address concerns of energy leaders.

The government is not only using the military to stop attacks, but is also trying to adopt other measures. Officials are planning to expand the amnesty program to include oil companies. Under the program, militants that lay down their arms will receive monetary and non-monetary benefits from the government.

Editing by Raza Ali; Graphics by Danish Raza

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