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Bloomberg: Eni Says Flowstation in Nigeria Attacked By Militants (Update3)

By Adam L. Freeman

June 18 (Bloomberg) — Eni SpA, Italy’s biggest oil company, said armed militants attacked one of its flowstations in Nigeria yesterday, leaving 27 people unaccounted for.

Eight out of 24 workers and 40 of 51 soldiers managed to escape the attack at the Ogbainbiri facility, Rome-based Eni said today in a statement posted on its Web site. The company couldn’t say if the missing people had been kidnapped, according to a spokesman who declined to be named. Eni said it knew of no casualties at the station.

Eni has been struggling to increase output after militant attacks in Nigeria and expropriations in Venezuela hampered operations. The company’s production fell 13 percent in the first quarter. The latest attack comes less than a week after Chief Executive Officer Paolo Scaroni said output at another Nigerian facility had returned to normal following an attack in May.

Militants are targeting foreign oil companies to press their demands for a greater share of Nigeria’s wealth.

“It’s a problem of local populations versus oil companies because they assert that money has gone to Switzerland or evaporated with little benefit to them,” Antoine Leurent, an analyst with KBC Securities in Paris, said by telephone today. “With low production costs, companies accept the political risk.”

Oil installations belonging to Eni and Royal Dutch Shell Plc have suffered numerous attacks, causing Nigeria’s production to fall by about 600,000 barrels a day, more than a quarter of the country’s output.

40,000-Barrel Plant

An Eni spokeswoman, who asked not to be named because of company policy, wasn’t immediately able to say if the latest clash affected output. Italian news agency Ansa said the Ogbainbiri station has a capacity of 40,000 barrels a day.

Ogbainbiri, in the Niger Delta’s Bayelsa state, was the location of a gun battle last week between the military and suspected militants that left eight militants dead, Azibapu Eruyani, a spokesman for Bayelsa state, said by telephone today.

Shell last week said the situation in Nigeria prompted it to cut at least 200 jobs from its operations there and lose at least $100 million.

To contact the reporter on this story: Adam L. Freeman in Rome at [email protected]

Last Updated: June 18, 2007 07:21 EDT

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