Nigerian pipeline attacked, oil stopped

U.S. oil company Chevron Corp. confirmed this weekend that it has been forced to shut in production at a Nigerian oil production facility after militants attacked an oil pipeline last week.

"The company is currently assessing the situation," Chevron said in a statement emailed to Tootoo.com. "The joint venture's onshore production has been shut in to protect the environment. At this stage, we are assessing the situation and cannot provide specific production figures."

Industry sources say that Chevron had declared force majeure, halting 120,000 barrels a day output. The stipulation, provided under its contract, would legally allow Chevron to miss contracted deliveries because of circumstances beyond its control.

Military commander Brigadier-General Wuyep Rimtip told AFP that the attack was on the Abiteye-Olero crude oil line near Chevron's Escravos terminal and may have been carried out by militants using dynamites and rocket-propelled grenades. No one was injured, he added.

The latest attack came as Anglo-Dutch oil giant Royal Dutch Shell (RDSA.LN) declared force majeure on 225,000 barrels a day for June and July deliveries from its offshore Bonga oilfield in Nigeria, following an attack by militants on Thursday.

No group has claimed responsibility for the latest attack. The raid on Shell's Bonga offshore oilfield was claimed by the Movement for Emancipation of the Niger Delta.

Chevron operates and holds a 40% interest in 13 concessions covering 2.2 million acres, predominantly in the onshore and near-offshore regions of the restive Niger Delta.

Last year, its total production from 32 fields averaged 353,000 barrels a day of crude oil, 14 million cubic feet of natural gas and 4,000 barrels of liquefied petroleum gas, according to its Web site.

According to the International Energy Agency statistics, Nigeria produced an average 2.13 million barrels a day in 2007, making it the 13th biggest producer in the world.

It was until recently Africa's largest producer before it was overtaken in April by Angola.

Production losses in Nigeria have contributed to the surge in oil prices over the last two years.

For the last two years, Nigeria has lost about a quarter of its daily production because of attacks on pipelines and terminals and the kidnapping of key staff, foreign and Nigerian.

Production is stuck at around 2 million barrels a day, where Nigeria was aiming for 4 million by 2010.