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Strike, rebel attacks hit Nigerian oil output

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A man walk past a banner for oil giant Royal Dutch Shell in Nigeria’s main city of Lagos January 12, 2006.: REUTERS/George Esiri
Reuters: Strike, rebel attacks hit Nigerian oil output

Fri Apr 25, 2008 11:31am EDT
Tume Ahemba

LAGOS (Reuters) – A strike by workers and attacks by rebels have forced Nigeria’s two biggest oil firms, Exxon Mobil and Royal Dutch Shell, to shut in some production, keeping world oil prices near all-time highs on Friday.

Exxon Mobil (XOM.N: Quote, Profile, Research), Nigeria’s leading producer, started closing down its output because of a strike by workers over a labor dispute, with one union official saying 200,000 barrels per day of crude were already shut in.

“The entire company is on strike today. All output (from Exxon’s Nigerian oilfields) is affected,” an Exxon official, who asked not to be named, said.

Rebels in the Niger Delta meanwhile attacked a major oil pipeline belonging to Royal Dutch Shell (RDSa.L: Quote, Profile, Research) late on Thursday, the fourth such attack in a week.

“We can confirm there was an attack on our pipeline around the Kula area in Rivers state,” Precious Okolobo, a spokesman for Shell in Nigeria, said. “We are trying to get more details on the extent of the damage.”

Shell has already been forced to shut 169,000 bpd of Bonny Light crude oil production after a pipeline attack in the Delta a week ago and has said it also investigating the damage from two further strikes on Monday.

It has declared force majeure on Bonny Light exports for the rest of April and May, meaning it cannot guarantee to meet its contract commitments, although it has said some barrels would still be exported while the measure is in place.

“Our candid advice to the oil majors is that they should not waste their time repairing any lines as we will continue to sabotage them,” MEND said in an emailed statement.

“We have time on our side and there is so much to be destroyed,” the group said.

The problems in Nigeria, the world’s eighth-biggest oil exporter, and tensions between the United States and Iran pushed oil above $119 a barrel. Prices have weakened from Tuesday’s record high of $119.90 as the U.S. dollar rebounded from record lows.

NEGOTIATIONS FAIL

The Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) called the strike at Exxon Mobil’s local unit, targeting oil production and exports, after failing to reach agreement with the company over a labor dispute.

The Nigerian government had met with the feuding parties on Wednesday and asked them to resume negotiations.

“There was no deal, the strike is on, Mobil offices are all shut,” PENGASSAN President Peter Esele told Reuters.

Exxon Mobil is the largest oil producer in Nigeria, producing some 800,000 barrels per day in a joint venture with the state. The company’s equity share is around 427,000 bpd.

“As we speak now, about 200,000 barrels have already been shut,” a senior union official, who asked not to be named, said.

Exxon confirmed that PENGASSAN had withdrawn its services from the company’s upstream affiliates in Nigeria.

“Since the safety of our workers and the integrity of our operations is our foremost concern, the affiliates have began a safe and orderly shut-in of production,” the company said in a statement.

“We are working with the Nigerian government to resolve outstanding issues and minimise any supply impact,” it said.

(For full Reuters Africa coverage and to have your say on the top issues, visit: africa.reuters.com/ )

(Additional reporting by Ikuko Kao and Randy Fabi; Writing by Nick Tattersall; Editing by Pascal Fletcher/James Jukwey)

© Thomson Reuters 2008 All rights reserved

http://www.reuters.com/article/reutersComService_3_MOLT/idUSL2579417320080425?sp=true

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