This Day (Lagos)

15 November 2010

Nigeria: Production Drops as Militants Hit Mobil Facility

Lagos — Nigeria has recorded further reduction in its crude oil production as by US oil major, Mobil Producing, operator of the Nigerian National Petroleum Corporation (NNPC) joint venture, yesterday shut in some chunks of its oil production following an attack on its offshore facility in Akwa Ibom State by suspected militants.

The oil major, which confirmed the shut-in via a statement to Dow Jones Newswires, said: "Production on the facility has been shut in as a precautionary measure."

An Executive Director at Exxonmobil, Mrs. Gloria Essien-Danner, who confirmed the attack in an earlier statement, was silent on the amount of production affected by the incident and also did not name the field affected.

It was, however, learnt that project that was affected in the attack was the Oso project.

Oso had been targeted in previous disruptions. It has in the past produced some 75,000 barrels of oil a day with estimated reserves of 500 million barrels of oil, Dow Jones quoted multiple sources as saying.

The attack on Mobil facility is coming barely one week after the Movement for the Emancipation of the Niger Delta (MEND) abducted seven crew members on an oil rig operated by the United Kingdom listed exploration company, Afren Plc, and injured two persons.

The escalation of violence in the Niger Delta region in the last three weeks, industry sources said, has further reduced Nigeria's crude oil production, which currently stands at 2.2 million barrels per day.

Essien-Danner had confirmed that unknown armed persons on Sunday evening boarded the offshore facility.

"Mobil Producing Nigeria, operator of the Nigerian National Petroleum Corporation NNPC/ MPN Joint Venture confirms that one of its offshore facilities was boarded by unknown armed persons in the evening of Sunday, November 14, 2010. Relevant government and security agencies have been informed and appropriate response measures are underway at this time. We restate our commitment to ensuring the safety of people and property," the statement read.

A security source said the incident could be a reprisal following a recent raid by the military on militants' camps in Bayelsa State.

Nigeria was producing about 2.5 million barrels of oil per day prior to the outbreak of violence in the Niger Delta in 2006.

Production was reduced to about 1.3 million barrels following the spate of attacks on oil facilities.

However, following the amnesty programme, which brought normalcy to the region, production now stands at 2.2 million because of increase in exploration activities.

The peace deal between the Federal Government and the militants, which culminated in the amnesty exercise, was first shattered on October 30, when armed militants attacked an oil facility belonging to the Italian oil company, Nigeria Agip Oil Company (NAOC).

Crude oil trunk lines connecting the Osiama oilfield/flowstation in Southern Ijaw Local Government area to Brass oil export terminal was blown up with explosives.

There have also been pockets of attacks on companies in the region, even with the amnesty in place, but the November 8 attack on an offshore oil rig operated by the exploration firm, Afren Plc, was one of the biggest of its kind since the amnesty programme took off last year.

The Okoro field off Akwa Ibom State was attacked by gunmen who took five crew members, two Americans, two French and one Canadian hostage, while wounding two others.

The attack on the shallow-water field, which is Afren's biggest producing oilfield with an average output of 17,300 barrels per day, had prompted the company to temporarily suspend operation.

Although MEND did not own up immediately, the group, which threatened to unleash more mayhem on companies in the region, had after 24 hours, claimed responsibility for the attack on Afren's High Island VII jackup rig, which recently arrived in the Okoro field and was preparing to begin drilling.

Meanwhile, eight members of staff of Exxonmobil were on Sunday night kidnapped in Oso Gas and Condensate Complex located in Akwa Ibom.

THISDAY gathered that the kidnappers had stormed the platform in six speed boats armed with various weapons of destruction as they shoot sporadically for about 10 minutes before finally adopting the workers who are members of the Petroleum and Natural Gas Senior Staff of Nigeria (PENGASSAN).

THISDAY further learnt that security at the platform tried to engage the kidnappers but later retreated for safely reasons.

It took the courage of the staff to immediately shut down the platform that has installed capacity of 80kb condensate and 60kb NGL through what is known as Emergency Shut Down (ESD) as part of precautionary measures to prevent the whole complex from being consumed by fire.

The President of Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), Comrade Babatunde Ogun, has called on security agencies to immediately secure the safe release of the kidnapped oil workers.

Ogun said no communication had been established with either the kidnappers or the oil workers, expressing fear that the victims might have been taken to Cameroon since the platform is close to a border town.

"The kidnappers that stormed the platform around 10pm last night with six speed boats armed with various weapons of destruction and shooting sporadically to the air and it only took the bravery and ingenuity of the staff to shut down the platform that has installed capacity of 80kb condensate and 60kb NGL.

"As at this period, we have not been able to establish contact with the abductors. At the time of this attack 74 people were on board while eight people were kidnapped. PENGASSAN call on government to ensure they are found and released immediately," Ogun said.

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