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Shell Shuts Nigeria's Bonga Oil Field After Attack (Update6)

By Alexander Kwiatkowski and Julie Ziegler

June 19 (Bloomberg) -- Royal Dutch Shell Plc said it shut down the Bonga oil field in Nigeria because of a militant attack, the first time the deepwater facility 120 kilometers (75 miles) offshore has come under assault.

``There has been an armed attack on the Bonga field production unit,'' Shell spokesman Rainer Winzenried said in an interview from The Hague. Bonga crude shipments were scheduled to average 190,000 barrels a day in June, based on loading schedules. Attacks by militants previously focused on onshore and shallow fields in the creeks of the Niger river delta.

``It's certainly of a different tactical order,'' Antony Goldman, an independent U.K.-based analyst specializing in Nigeria, said by telephone from London. Goldman said he was surprised the militants had the ``hardware'' to carry out such an attack.

Nigerian Navy spokesman Henry Babalola said three people were kidnapped from a private security vessel during the Bonga attack. Gunmen in three speedboats also attacked a vessel near Pennington and abducted the ship's captain, a U.S. national, Babalola said by phone.

The Movement for the Emancipation of the Niger Delta claimed responsibility for the Bonga attack and urged oil companies to evacuate foreign staff from Nigeria.

The group released the ship's captain, a U.S. national, at 4:45 p.m. local time, MEND spokesman Jomo Gbomo said in an e- mailed statement.

Tankers At Risk

MEND, which has stepped up attacks on Nigeria's oil infrastructure since April, also said that oil and gas tankers were at risk of attack if they entered Nigerian waters.

Shell Nigeria already has as many as 400,000 barrels of crude a day shut in as a result of militant attacks.

Shell officials are flying over the Bonga platform to assess the scale of the damage, Winzenried said. The field is situated in production license 212, in depths of more than 1,000 meters. Force majeure, a legal clause which allows producers to miss contracted deliveries because of circumstances beyond their control, has not been declared, he said.

Bonga production began in November 2005 and the field has the capacity to pump 225,000 barrels a day. Crude is pumped from 16 subsea wells via the floating production, storage and offloading vessel.

The field is operated by Shell Nigeria Exploration and Production Co., the offshore Nigerian unit of Europe's biggest oil company.

Militant Raids

Shell Petroleum Development Co., Shell's onshore Nigeria production joint venture, has between 350,000 and 400,000 barrels a day of crude production shut by militant raids, Mutiu Sunmonu, the managing director of the unit, said earlier this week.

Frontline Management AS, which manages ships for Frontline Ltd., the world's largest owner of supertankers, is ``aware of the dangers'' in Nigeria, temporary Chief Executive Officer Jens Martin Jensen, said by phone from Oslo today. The company will continue to watch for any escalation in the situation, he said.

U.S. State Department spokesman Tom Casey, speaking before MEND announced the release of the American national, said diplomats were in contact with the person's employer to help notify the family. Casey declined to identify the person pending the family's notification.

``We're also in contact with the Nigerian government and law enforcement officials to try and see what we can do to help ascertain the individual's whereabouts'' and secure his release, Casey told reporters in Washington today. ``We certainly would call on the individual's captors to release him immediately and unharmed.''

To contact the reporters on this story: Alexander Kwiatkowski in London at akwiatkowsk2@bloomberg.netJulie Ziegler in Lagos at jziegler@bloomberg.net

Last Updated: June 19, 2008 15:54 EDT

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