Royal Dutch Shell Plc  .com Rotating Header Image

Shell Reduces Nigerian Oil Output After Attack at Sea


The Wall Street Journal Home Page

Shell Reduces Nigerian Oil Output 

After Attack at Sea

June 20, 2008; Page A10

LONDON — Royal Dutch Shell PLC temporarily suspended 225,000 barrels a day of oil output in Nigeria after an attack on its floating production facility about 75 miles offshore.

A Nigerian militant group, the Movement for the Emancipation of the Niger Delta, or MEND, claimed responsibility for the attack Thursday and threatened further attacks at the site.

Shell said it suspended all production at its Bonga field while it investigates. The overnight assault is worrying the oil industry because it is the first time militants have successfully ventured so far offshore and taken out production at a major offshore oil field.

Shell spokesman Rainer Winzenried said it is too early to know whether it will be necessary for the company to declare force majeure on exports, which would provide Shell with legal protection if it wasn’t able to meet its contractual obligations.

No Shell staff was injured or abducted in the attack, Mr. Winzenried added. There was no security protecting the Bonga field facility, which includes a drilling platform and loading facility.

In a prepared statement, MEND threatened a new attack on the Bonga facility. “We therefore ask all workers in the Bonga fields to evacuate for their safety as the military cannot protect them,” it said.

A senior Nigerian oil official said the government was dispatching naval boats into the Gulf of Guinea to boost protection of offshore oil fields, where the bulk of new Nigerian oil production is coming from.

Many oil companies, including Chevron Corp., have been developing big Nigerian offshore oil fields, not only because of the Gulf of Guinea’s hydrocarbon potential, but also to escape the violence and militant attacks at onshore locations. The attacks have crippled the West African country’s oil output over the past two years.

With the latest assaults, total temporary suspensions in Nigeria caused by militant attacks account for 800,000 to one million barrels a day of Nigerian capacity. That represents about half of the country’s effective pumping capacity.

Crude-oil futures prices initially moved higher on the news, the latest development stoking market unease at the health of global crude-oil supply flows. News that China will raise gasoline and diesel prices later sent light, sweet crude for July delivery down 3.5% Thursday on the New York Mercantile Exchange.

Handicapped Nigerian production has been a contributor to prices reaching records near $140 a barrel this year. The West African country’s light, sweet crudes are highly prized by refiners given their high gasoline- and distillate-products yield.

The restrictions to Nigerian output have come at a time when the markets are increasingly concerned about whether global crude-oil supplies will be able to keep up with soaring demand, particularly from countries in Asia and the Middle East.

–Nick Heath and Lananh Nguyen contributed to this article.

Write to Angela Henshall at [email protected] and Spencer Swartz at [email protected] and its also non-profit sister websites,,,,, and are all owned by John Donovan. There is also a Wikipedia article.

0 Comments on “Shell Reduces Nigerian Oil Output After Attack at Sea”

Leave a Comment

%d bloggers like this: