Shell warns on Nigeria oil exports after attacks
LAGOS (Reuters) - Royal Dutch Shell (RDSa.L) warned on Tuesday it may not be able to meet all of its oil export obligations from Nigeria for the next few months after militants blew up parts of a key pipeline in the Niger Delta.
The Anglo-Dutch giant declared force majeure on its Bonny Light crude oil exports for July, August and September, freeing itself from contractual obligations, after Monday's attack by the Movement for the Emancipation of the Niger Delta (MEND).
MEND launched a campaign of violent sabotage against industry installations in the world's eighth-biggest oil exporter in early 2006, saying it was fighting for the people of the Niger Delta to gain greater control of oil resources.
Its latest strike on the Nembe Creek trunk pipeline, which industry sources say carries about 130,000 barrels per day (bpd) of crude to the Bonny export terminal, comes just as Nigeria's output is expected to edge back over the 2 million bpd mark.
"(We) are working to repair the line and restore production," Caroline Wittgen, a spokeswoman for Shell in Nigeria, said.
The oil from the facility is particularly popular in the United States and Europe because it is easily refined into gasoline, diesel and other crude products.
The unrest in the delta, a vast network of mangrove creeks flowing into the Gulf of Guinea, has cut Nigeria's output by around a fifth and helped push global energy prices to record highs, piling pressure on President Umaru Yar'Adua.
Yar'Adua took office more than a year ago pledging to address the root causes of the instability, but plans for a long-delayed peace summit have fallen into disarray and criminality in the region appears to be increasing.
Gunmen kidnapped more than a dozen foreign oil workers in at least three separate incidents last week in what security sources said appeared to be an effort to spread the military as thinly as possible. Most have since been released unharmed.
POLITICALLY MOTIVATED
The instability has been a major headache for Shell, which was long the leading oil producer in Nigeria and has been hardest hit among foreign oil firms by the unrest.
The company operates onshore and shallow water oilfields in the West African country through its SPDC unit, in a joint venture with Nigeria's state-run oil firm NNPC.
Industry sources say Exxon Mobil (XOM.N) has overtaken Shell as the top producer in Nigeria, largely because a higher proportion of its facilities are in deep water far off the coast, where militants find them harder to attack.
But in June, MEND launched its most daring strike yet against Shell's $3.6 billion Bonga oilfield, which lies some 120 km (75 miles) from the coast, forcing the company to shut down the 220,000 bpd operation for several days.
MEND has said its latest attack on the Nembe Creek trunkline was meant to prove it did not receive payments from the government to end its attacks, underscoring the fragile nature of efforts to pacify the region.
The latest strike came as traders expected Nigeria's crude exports to rise to 2.02 million barrels per day in September, following pipeline repairs.
Traders said on Monday the preliminary September programs showed an increase from estimated exports of 1.94 million bpd in August but warned that further attacks could disrupt supplies.
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(Editing by Randy Fabi and James Jukwey)
