Nigerian Militants Say They Attacked Shell Pipeline (Update4) - Bloomberg.com

Nigerian Militants Say They Attacked Shell Pipeline (Update4) - Bloomberg.com

June 25 (Bloomberg) -- The Movement for the Emancipation of the Niger Delta, the main militant group in Nigeria’s southern oil region, said it attacked a “major” crude oil pipeline supplying Royal Dutch Shell Plc’s Bonny export terminal.



Fighters from the group, known as MEND, damaged the Bille- Krakrama pipeline overnight, cutting supplies from Shell’s Cawthorne 1, 2 and 3 oil-pumping stations, MEND spokesman Jomo Gbomo said in an e-mailed statement today.

The militant group has stepped up a sabotage campaign against Nigeria’s oil industry since a military offensive against its positions began last month in the Niger River delta that produces almost all of the country’s crude. Oil facilities run by Chevron Corp. and Eni SpA also have been damaged.

Catherine Aitken, a Shell spokeswoman in The Hague, confirmed an attack on a manifold on the Krakrama pipeline and said the Awoba oil-pumping station was shut because of the incident. Shell is sending an emergency response team to the location to help “limit damage to the environment,” Tony Okonedo, a Shell Nigeria spokesman, said by phone in Lagos.

Crude oil prices in New York rose above $69 following news of the attack.

20 Percent Cut

Attacks by armed groups have cut Nigeria’s oil exports by more than 20 percent since 2006 and deterred investments. Nigeria is producing between 1.3 million and 1.4 million barrels of oil a day, compared with an average of 1.8 million barrels in the first quarter of this year, Switzerland-based Petromatrix GmbH said in a note to clients today.

The West African nation has the continent’s biggest hydrocarbon reserves, including more than 30 billion barrels of oil and more than 187 trillion cubic feet of gas, according to the Ministry of Petroleum Resources. MEND says it’s fighting for the region’s poor to get a greater share of energy resources.

President Umaru Yar’Adua declared an amnesty today for insurgents in the 70,000-square kilometer (27,000 square mile) region of swamps and rivers, who give up their weapons and agree to rehabilitation to avoid prosecution.

“The offer of amnesty is predicated on the willingness and readiness of the militants to give up all illegal arms,” Yar’Adua said.

MEND will analyze the speech before issuing a response, Gbomo said today in an e-mailed response to questions. “Talk is cheap,” he said.

Yar’Adua met visiting Russian President Dmitry Medvedev in the capital, Abuja, yesterday and oversaw the signing of several agreements, including one for a joint venture between Nigerian National Petroleum Corp. and Russia’s OAO Gazprom for investments in gas infrastructure and transportation.

‘Worthless’ Agreements

MEND will ensure that the agreements signed by the two countries on oil and gas exploitation “are worthless,” Gbomo said in today’s statement. The destruction of installations is “the fate that awaits the gas pipelines” to be built by Gazprom “if justice is not factored” into the process, he said.

Nigeria’s 125,000-barrel-a-day Warri refinery was shut after militant attacks cut the Chanomi Creek pipeline that supplies it crude oil, the state-owned Nigerian National Petroleum Corp. said today.