Oil War Continues

Nigerian militants threatened on Wednesday to broaden their "oil war" to offshore oilfields and announced attacks on a crude oil pipeline in the Niger Delta and another Shell-operated facility.


The Movement for the Emancipation of the Niger Delta (MEND), responsible for attacks that have cut a fifth of OPEC member Nigeria's oil output, said it would launch attacks outside Rivers state for the first time since clashes began on Saturday.


Oil traders on Wednesday began to take notice of the rise in violence and that helped push prices above $94 a barrel in early trading. The market has fallen sharply this week on the impact of the credit crisis on the global economy.



The heaviest fighting between militants and security forces in more than two years has spread to about 10 villages in Rivers state, home to oil city Port Harcourt. Some private security sources estimate dozens have died.


"After Rivers, the hurricane will be heading to the neighbouring states in the Niger Delta," MEND said in an e-mailed statement.


Experts believe the clashes could continue for weeks as the military tries to capture or kill top militant leaders and regain control of the region's oil resources.


"The fight is over control of oil resources and the right to tap those resources," said Antony Goldman, an analyst at London-based risk consultancy PM Consulting.


Militants have bombed pipelines, platforms, gas plants and oilfields, halting up to 150,000 barrels per day (bpd) of oil production in the past five days, said an official with state oil firm NNPC.


The world's eighth largest oil exporter is currently pumping around 1.95 million bpd.
MEND, which says it is fighting for more local control of the impoverished region's oil wealth, attacked Shell's Orubiri flow station and a crude oil pipeline at Rumuekpe in Rivers state late Tuesday and early Wednesday.


"It is feared the (Orubiri) facility may have caught fire due to intense, sporadic gunshots and massive dynamite and bomb explosions," said Lieutenant Colonel Sagir Musa, spokesman for the military task force in Rivers state.


Musa said no soldiers were killed in the attack, which involved an assault by eight gunboats.
Militants said their next targets would be major offshore oilfields.


"Soldiers and oil workers are advised to abandon all oil facilities including the offshore rigs of Bonga and Agbami as we want to minimise casualties," MEND said.


MEND launched its most daring strike in June against Shell's $3.6 billion Bonga oilfield, which lies some 120 kilometres from the coast, forcing the company to shut down the 220,000 bpd operation for several days.


MEND's other target, Chevron's Agbami oilfield, is Nigeria's newest oilfield. The facility, which started production in late July, is expected to pump about 100,000 bpd by February.
Chevron and Shell officials said they did not discuss their security plans.


MEND said it was still holding 27 oil workers captive as leverage for the release of suspected militant leader Henry Okah, who is in jail for gun-running and treason.


A Nigeria military spokesman said late on Tuesday two South African hostages had been released, but MEND denied this.


MEND said on Monday it would release the pair after a personal appeal from Okah's wife.



(Reuters)