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MarketWatch: Shell says 12,000 barrels a day halted at occupied Nigerian oil unit

Update: 7:14 AM ET Dec 15, 2006

YENAGOA, Nigeria (AP) — Royal Dutch Shell PLC (RDSB) officials said Friday the company has shut down an occupied Nigerian oil facility, a move that will cut production by 12,000 barrels a day.

Earlier, armed men took control of the compound, and Shell officials said a nearby flowstation – a facility where oil pipelines converge – was shut as a precaution.

Joshua Benemesia, a local chief who has mediated hostage negotiations in Nigeria’s oil-rich delta region, said at least one man was shot in the attack. There were no immediate reports of deaths.

Scores of oil workers – mostly local Nigerians – typically live in such compounds. Shell spokesman Bisi Ojediran declined to say how many people were currently in the facility.

Police confirmed the assailants were still at the Shell installation in Nigeria’ Bayelsa state Friday morning and said authorities would take action to regain control.

“The military are looking at how to take the facility,” Bayelsa Police Commissioner Hafiz Ringim said.

Attacks have become common in the southern river delta of Africa’s largest crude producer. Assailants have ranged from militants saying they’re fighting for the freedom of their imprisoned leaders and a greater share of oil wealth to criminal gangs looking for a quick ransom from hostages.
Benemesia – head of a government-funded group that is attempting to curb attacks in Bayelsa – said he hadn’t seen the assault himself, but had talked to members of his group at the scene. He didn’t have exact details on the number of attackers involved but said there were around 14.

The group called itself the Niger Delta Freedom Fighters, Shell’s Ojediran said. He didn’t say if the group had made any specific demands.
Attacks on pipelines and oil facilities have cut the West African country’s usual daily output of 2.5 million b/d by about a quarter this year.

Nigeria is the fifth-largest supplier of oil to the U.S., and attacks in the Niger river delta have often moved world oil markets.

This latest incident occurred as the oil-exporting cartel OPEC wrapped up a meeting in Nigeria’s far-off capital, Abuja. On Thursday, the group said it planned to output cut in early 2007, pushing oil prices above $62 a barrel.

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