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Shell to declare ‘force majeure’ at Nigerian terminal

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AFP: Shell to declare ‘force majeure’ at Nigerian terminal

LAGOS (AFP) — Anglo-Dutch oil firm Shell Monday said it may not be able to honor contracts for April and May after a leading Nigerian militant group attacked two key pipelines of Africa’s top petroleum producer.

“We can confirm that force majeure will be declared on Bonny Terminal liftings for April and May 2008,” a company official told AFP.

Company spokesman Tony Okonedo said he could “confirm two new attacks on the Soku-Buguma and Buguma-Alakiri pipelines,” adding: “We are assessing the damage to these facilities.”

The Movement for the Emancipation of the Niger Delta (MEND) militant group, active in the west African country’s oil-rich south, claimed responsibility for the attack on Shell’s key Bonny terminal in an e-mail on Monday.

The attack, in Rivers State, was part of MEND’s “Operation Cyclone” which the group said was “aimed at crippling Nigeria’s oil export industry.”

Oil prices shot to a record 117.81 dollars on the New York contract as traders seized on the unrest in key producer Nigeria, the weak US currency and OPEC’s refusal to increase production.

At the same time, London’s Brent North Sea crude for June delivery hit a record 114.86 dollars.

Shell, Nigeria’s largest oil operator accounting for around half of the country’s 2.1 million barrels per day output, has seen a wave of attacks on its facilities in recent months.

Overall, violence in the southern Delta region has reduced Nigeria’s total production by a quarter since January, 2006.

MEND emerged early that same year as the leading group calling for a greater share of Nigeria’s oil revenue for the producer region.

It also wants local development in the oil-rich areas where the population often lives in abysmal poverty with scant infrastructure.

As well as attacking facilities, MEND has also kidnapped local and expatriate oil workers.
Shell said Saturday it had slightly reduced oil production following Thursday’s sabotage with explosives on a pipeline feeding the Bonny exports terminal, which had also caused a minor crude spill.

Bonny along with the terminal at Forcados east are Shell’s most important installations in Nigeria.

Copyright © 2008 AFP. All rights reserved.

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