UPDATE 4-Nigeria militant attack on Chevron shuts 100,000 bpd

Mon May 25, 2009 10:40am EDT

* First major strike since military offensive

* Chevron says 100,000 bpd shut-in

* Oil infrastructure at continued risk

(Recasts, adds background, details)

By Nick Tattersall

LAGOS, May 25 (Reuters) - Nigerian militants launched their first major strike against the oil industry since the start of a 10-day old military offensive late on Sunday, bombing a Chevron (CVX.N) pipeline and shutting 100,000 barrels per day of output.

The Movement for the Emancipation of the Niger Delta (MEND) said in an email it had sabotaged pipelines to flow stations at Alero Creek, Otunana, Abiteye, Makaraba and Dibi feeding a Chevron facility in Delta state.

The U.S. energy firm confirmed one of its pipelines in the Abiteye area was breached on Sunday and said it had shut in production as a precautionary measure while checks were made.

"To protect the environment, the incident has led to the shut in of approximately 100,000 bpd production from swamp operations in Delta State," a Chevron spokesman said.

"The company is currently assessing the situation, while the incident has been reported to relevant government agencies."

The military began its biggest offensive for years 10 days ago, bombarding militant camps around Warri in Delta state from the air and sea and sending three battalions of soldiers to hunt down rebels believed to have fled into surrounding communities.

It said it could no longer "fold its hands" after attacks on soldiers, pipeline bombings and the hijacking of oil vessels, all of which have prevented Nigeria from reaching its full production potential in recent years.

The OPEC member's output peaked at around 2.4 million bpd before MEND burst onto the scene in early 2006 and knocked out almost a quarter of production in a matter of weeks.

Output has never fully recovered. Oil Minister Rilwanu Lukman told reporters at a G8 energy ministers' meeting in Rome on Monday that Africa's biggest exporter was currently pumping about 1.5-1.6 million bpd, roughly half its installed capacity.

INFRASTRUCTURE EXPOSED

The security forces say they have destroyed at least two major militant camps in the Chanomi Creek area around Warri since launching their offensive and that they are now in control of the ground in the surrounding creeks.

But industry and security sources say it is virtually impossible to fully protect hundreds of kilometres of pipeline running through remote and largely unpopulated areas, leaving infrastructure exposed to hit-and-run guerrilla raids.

MEND warned such attacks would continue.

"We will continue our cat-and-mouse tactics with (the military) until oil exports cease completely," it said.

Militant groups say they are fighting for a fairer share of the oil wealth for local people in the Niger Delta, still deeply impoverished despite five decades of oil extraction.

But the armed gangs have grown rich from the industrial scale theft of crude oil, worth millions of dollars a day, and the line between militancy and criminality is blurred.

Security experts say the military offensive had been on the cards for years but had been delayed partly by a lack of equipment and training. The arrival of new hardware and a change in the military top brass stiffened the government's resolve.

Major-General Sarkin-Yaki Bello, who commands the joint military taskforce in the delta, said two officers and 16 soldiers were missing since the operation began.

The army says it will continue with its "cordon-and-search" operations in the creeks around Warri until they are found.

(For full Reuters Africa coverage and to have your say on the top issues, visit: af.reuters.com/ ) (Additional reporting by Joe Brock in London, Deepa Babington in Rome and Segun Owen in Yenegoa; editing by James Jukwey)

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