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Nigeria Militants Attack Oil Pipelines

Reuters
Monday, 28 Jul 2008 | 9:51 AM ET

Militants in Nigeria's Niger Delta said on Monday they had attacked two major oil pipelines belonging to Royal Dutch Shell, forcing the firm to halt some production and helping push world oil prices higher.

The Movement for the Emancipation of the Niger Delta (MEND), whose campaign of violence has cut Nigeria's oil output by around a fifth since early 2006, said its members conducted the attacks in the early hours of Monday morning.

"Detonation engineers backed by heavily armed fighters ... sabotaged two major pipelines in Rivers state of Nigeria," it said in an e-mailed statement.

Shell, which operates onshore in Nigeria in a joint venture with state oil firm NNPC, said it had halted some output from the Nembe Creek trunkline but gave no details on the volume.

Industry sources said about 130,000 barrels per day of crude oil flows through the pipeline to the Bonny export terminal in Nigeria, the world's eighth largest exporter.

Oil from the facility is popular in the United States and Europe because it is easily refined into gasoline, diesel and other crude products.

U.S. crude oil prices rose on the news, trading above $124 a barrel on Monday.

Warning

The Shell-operated pipeline has been a target of previous militant attacks, most recently in May, due to its vulnerable location in the deep forests of the delta -- the heart of Nigerian production.

Last week, MEND warned it would target oil pipelines to prove it did not receive payments from the government to end its attacks on the oil sector.

The head of NNPC was quoted in Nigerian newspapers last week as saying the company had paid militant groups $12 million to protect facilities in the delta.

NNPC later said it was quoted out of context and the money was given to the local community, not militants.

Successive administrations in Nigeria have effectively bought off leaders of militant groups in the Niger Delta by offering financial rewards for laying down their weapons, a strategy known locally as "settling the boys."

MEND says it is fighting for greater control of the natural resources in the delta, an impoverished area polluted by half a century of oil exploration.

President Umaru Yar'Adua has pledged to try to address the root causes of the unrest in the delta by bringing development to local communities but has also said he will not tolerate the presence of armed groups in the creeks.

Plans for a long-delayed peace summit promised by his administration have fallen into disarray after a key government-appointed mediator resigned this month and MEND said it would not take part.

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