- Shell, Chevron staff evacuated after installation attacks
- Crude output from West African nation is lowest in 20 years
Nigeria’s military said it would “crush” rebels in the nation’s crude-producing region after oil companies evacuated non-essential workers due to the deteriorating security situation.
The armed forces are aware of a new group in the Niger River delta “who have vowed to cripple economic activities,” Brigadier General Rabe Abubakar said in a statement on Tuesday. “The military will employ all available means and measures within its rule of engagement to crush any individual or group that engages in the destruction of strategic assets and facilities of the government.”
A resurgence of attacks on oil infrastructure caused Nigerian production to drop to the lowest in 20 years last month, compounding the impact of slumping crude prices on Africa’s largest economy. Formerly the continent’s largest oil producer, the nation has slipped into second place after Angola, according to data compiled by Bloomberg. A trade union official said oil companies had started evacuating workers.
“For the areas where the attacks took place, the evacuations were done for the safety of the workers,” Chika Onuebgu, Rivers state chairman of the Trade Union Congress of Nigeria, said by phone Tuesday. “It is not a lock-down, it is just a precautionary measure” and oil operations continue in areas not affected by attacks.
The current attacks echo a similar wave of violence between 2006 and 2009, which ended after militants accepted an amnesty from late-President Umaru Musa Yar’Adua, disarming in exchange for cash payments. The militants have been frustrated by current President Muhammadu Buhari’s decision to scale back the allowances.
“We have very unique problems in terms of pipeline security,” Emmanuel Kachikwu, Nigeria’s minister of state for petroleum, said on state television Tuesday. “We are aware that in the last few days, pipelines have been blown, but this should not make us lose hope.”
After a local newspaper reported the evacuations on Monday, Royal Dutch Shell Plc said it’s monitoring the security situation and taking steps to ensure the safety of staff and contractors.
About 90,000 barrels a day of output was halted last week following an attack on an offshore platform operated by a Chevron Corp.-led venture that serves as a gathering point for production from several fields. Even before that strike on Wednesday night, Nigerian oil production had fallen below 1.7 million barrels a day for the first time since 1994, according to data compiled by Bloomberg.
Exxon Mobil Corp., which also has operations in Nigeria, declined to comment on the security situation.
A group calling itself the Niger Delta Avengers said on its website that it was responsible for the attack on the Chevron facility. The authenticity of the claim could not be verified by Bloomberg News.
“The government needs to address this very quickly,” Onuegbu says. “Insecurity is becoming a big problem in the Niger delta with the return of these attacks.”
In February, Shell declared force majeure -- a legal clause that allows it to stop shipments without breaching contracts -- after an attack on a pipeline feeding the Forcados terminal, which typically exports about 200,000 barrels a day.
The International Energy Agency estimated last month that Nigeria could lose an estimated $1 billion in revenue by May, when it expects repairs on Forcados to be completed. The terminal may not restart until June, Kachikwu said April 20.
It’s “highly likely that violence will escalate in the Niger delta as the government increases its military presence and the militants respond with further attacks,” BMI Research said in a note. “In the short term, more oil and gas installations will be targeted.”