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AP Worldstream: State Department official cites Niger Delta threats as tops to U.S. businesses for 2007

Published: Dec 28, 2006

The kidnappings and armed attacks plaguing oil companies operating in Nigeria’s oil-rich Niger delta are among the top security challenges U.S. businesses are likely to face in 2007, a State Department official said Thursday.

“We’re keeping our eye on Nigeria right now,” Doug Allison, a special agent with State’s Bureau of Diplomatic Security, said in a phone interview. “That situation seems to be not getting any better.”

Allison’s comments came one day after the Overseas Security Advisory Council, which advises the agency on business activity abroad, released its top 10 list of the greatest threats to U.S. companies in 2006. The list included the Israeli-Hezbollah conflict in Lebanon, intellectual property piracy in Asia and corruption in Africa.

Allison is the executive director of the council, which was established in 1985 to promote security cooperation between the U.S. government and American businesses. Its members include Chevron Corp., which operates in Nigeria.

The instability in Nigeria, Africa’s largest oil producer, is well-known. Companies operate there under tight security and with police guards. Yet the violence continues, raising concerns among government and industry officials.

Nigeria’s crude output was slashed this year by roughly 500,000 barrels a day because of attacks from criminal gangs and militants seeking political influence. The Nigerian strife has helped to keep upward pressure all year on oil prices, which traded Thursday at $60.50 a barrel on the New York Mercantile Exchange.

More than 90 percent of the country’s oil is produced through joint ventures between the Nigerian government and major international oil firms, such as Royal Dutch Shell PLC, Exxon Mobil Corp., Chevron, Paris-based Total SA and Italy’s Eni SpA.

On Wednesday, the chief executive of Eni, Italy’s largest oil and gas producer, spoke with the Nigerian president in Lagos to try to secure the release of four workers _ three Italians and one Lebanese _ held hostage there since Dec. 7.

A pipeline blast in Lagos on Tuesday killed 265 people, and coupled with last week’s car bomb explosion outside a government building, illustrates direct consequences of local gasoline shortages amid ongoing political turmoil in the country.

“The first few weeks of the new year will likely be volatile, with probably more attacks on oil supplies _ just as happened in early 2006,” Sebastian Spio-Garbrah, a Eurasia Group analyst who focuses on Africa, said in a research note.

Also last week, gunmen raided a pumping station owned by Total, killing three police guards, and Royal Dutch Shell and several oil service companies began evacuating all dependents of foreign employees from the delta region due to the unsafe conditions.

The companies that operate in the Niger delta “build in safety wherever they can,” said John Felmy, chief economist at the American Petroleum Institute in Washington.

A Chevron spokesman said the San Ramon, California-based company places a “high priority” on employee safety, but would not provide any details on security measures at its facilities. He did say that Chevron has about 2,000 employees in Nigeria, about 90 percent of whom are Nigerian nationals.

The energy sector has “a culture of dealing with risk that has been fine-tuned” by working in remote, hostile environments worldwide, Allison said. But, he added, the Nigeria situation remains especially troubling.

Attempts to reach OPEC president and Nigerian oil minister Edmund Daukoru by phone were unsuccessful Thursday and he did not respond to an e-mail inquiry.

Copyright 2006 Associated Press and its also non-profit sister websites,,,,, and are all owned by John Donovan. There is also a Wikipedia article.

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