ExxonMobil rig attacked in Nigeria; production shut in

ExxonMobil Corp.’s Nigerian subsidiary confirmed a claim by the Movement for the Emancipation of the Niger Delta (MEND) that it attacked a company oil rig in the region and abducted eight oil workers, shutting in 45,000 b/d of natural gas liquids and condensate production.

Eric Watkins
OGJ Oil Diplomacy Editor

LOS ANGELES, Nov. 16 -- ExxonMobil Corp.’s Nigerian subsidiary confirmed a claim by the Movement for the Emancipation of the Niger Delta (MEND) that it attacked a company oil rig in the region and abducted eight oil workers, shutting in 45,000 b/d of natural gas liquids and condensate production.

“Mobil Producing Nigeria…confirms that unknown armed persons boarded the Oso platform on Nov. 14,” the company said, adding that the eight people remain unaccounted for and that NGL and condensate production of about 45,000 b/d on the facility have been shut in “as a precautionary measure.”

Earlier, MEND issued a statement saying said it carried out the attack on the rig, which is off Akwa Ibom state. The group claimed that its fighters boarded the rig and “detonated explosives they had earlier rigged to this facility, causing considerable damage.”

MEND justified the abduction of the local workers as a way of preventing the Nigerian government “from attributing the damage to this facility to an industrial accident.” The group also repeated earlier warnings that it would launch further attacks throughout the region.

“In the coming weeks, (MEND) will launch a major operation that will simultaneously affect oil facilities across the Niger Delta,” the warning said. Attacks could be launched on a variety of international oil companies operating in the region, including Chevron Corp., Total SA, and Royal Dutch Shell PLC, all of which work with the state-run Nigerian National Petroleum Corp.

MEND fighters in the Niger Delta have attacked oil pipelines and kidnapped workers since 2006, when they began a low-level insurgency. The militants claim to be fighting against the delta's endemic poverty and pollution caused by 50 years of oil production. Typically, the group condemns the Nigerian government and NNPC—and its IOC partners—for failing to address the region's problems.

Last November, Nigeria renewed three shallow-water oil licenses with ExxonMobil, granting the US firm leases of a further 20 years with the option to renew again. Licenses to OML 67, 68 and 70, then producing 580,000 b/d, expired in November 2008. The three blocks jointly account for most of Exxon's Nigerian production, and include the Qua Iboe, Yoho, and Oso streams.

Last month, sources close to NNPC said that due to “technical problems,” production of Oso condensate had dropped to 12,000 b/d from the 30,000 b/d that had been produced in earlier months. The technical problems were attributed to “pipeline integrity”—a phrase often used to describe leaks created by militant or bandit attacks.

This week’s attack could undermine cautious optimism expressed late last year over increased production from Nigeria based on an amnesty scheme for MEND fighters in exchange for a ceasefire.

“Total Nigerian oil production could come in at 2.5 million b/d in 2010 in our view,” said Adam Sieminski, chief energy economist, Deutsche Bank AG, Washington, DC.

“Although we harbor some concerns about the ability of the government and MEND to stick to maintain the ceasefire, the agreement is already beating skeptics’ estimates for duration,” Sieminski said (OGJ Online, Dec. 14, 2009).

Contact Eric Watkins at hiappalus@yahoo.com.

More in Companies