June 29 (Bloomberg) -- Royal Dutch Shell Plc, Europe’s biggest oil company, shut its Estuary oil field in Nigeria’s southern delta region after a militant attack.

The strike targeted two well clusters in the western Niger River delta, Tony Okonedo, a Shell spokesman, said by phone from Lagos today. “We’ve shut in some production as a precautionary measure while further investigations are continuing.”

The Movement for the Emancipation of the Niger Delta, the main rebel group in Nigeria’s oil region, said it attacked the oil field near Shell’s Forcados oil export terminal and set it ablaze. “A huge plume of smoke can be seen from several miles away,” Jomo Gbomo, a spokesman for the group, also known as MEND, said in an e-mailed statement today.

Crude oil for August delivery rose as much as 3.2 percent to $71.39 a barrel on the New York Mercantile Exchange after the attack and traded at $71.27 as of 4:13 p.m. London time.

Armed attacks in the delta, which accounts for almost all of Nigeria’s oil output, have cut more than 20 percent of the country’s crude exports since 2006. Nigeria is Africa’s leading oil producer and the fifth-biggest source of U.S. crude imports.

Fighters encountered a military patrol in the latest attack, resulting “in the sinking of the gunboat with all the occupants numbering between 20-23 soldiers,” MEND’s Gbomo said.

‘Isolated Pipeline’

The militants “attacked an isolated pipeline,” near Fordados, Colonel Rabe Abubakar, spokesman for the military task force in charge of oil region security said by phone today from the city of Warri. “There was no clash at all between us and the militants, so the issue of killing didn’t arise.”

The rebel group on June 25 rejected an amnesty proposal from President Umaru Yar’Adua, saying the offer failed to address key issues. Under the terms, fighters in the Niger River delta have until Oct. 4 to surrender their weapons, renounce violence and accept rehabilitation to avoid prosecution.

Issues not addressed by the offer include the “genuine, unconditional release” of MEND leader Henry Okah, who is facing trial for treason and gun-running, as well as the demand for locals control of resources, the group said.

MEND, which says it’s fighting on behalf of the region’s poor, has stepped up a sabotage campaign against Nigeria’s oil industry since a military offensive against its positions in the delta began last month.

The group said its objective is to destroy Nigeria’s oil infrastructure to force the government to address its political demands, adding that government efforts to deal with individual commanders will fail.

“MEND will negotiate as a group when the right time comes,” Gbomo said.

To contact the reporter on this story: Dulue Mbachu in Lagos at dmbachu@bloomberg.net

Last Updated: June 29, 2009 11:23 EDT