Oil Companies Withdraw Expatriates from N’Delta
•Shell declares force majeure on exports
By Chika Amanze-Nwachuku, 02.13.2009
Citing the heightened insecurity, coupled with the threat by the militant Movement for the Emancipation of the Niger Delta (MEND) to declare “sweeping assault” on the Nigerian oil and gas industry, companies operating in the region may have suspended further deployment of expatriate workers in the area pending when normalcy returns.
Also yesterday, Royal Dutch Shell said it had declared force majeure on its Nigerian Bonny oil shipments owing to insecurity in the oil-rich region.
A top official of one of the major oil companies told THISDAY last night that companies had resolved to “suspend further deployment of expatriates to the area until they are satisfied that their security is guaranteed”.
He said the upsurge in criminal activities in the area has assumed a worrisome dimension and that no company is happy to see its workers abducted or even killed in the process.
According to him, the cost of doing business has since this year tripled as companies now pay more to hire foreigners to work in the area, owing to the level of insecurity.
“The truth about the matter is that foreigners are now scared of going there to work no matter how much they are offered. On our own side, we are not happy about the development and would not want our staff harmed, so we have to monitor the situation for now,” he said.
The source expressed regrets that investigation showed that those behind the dastardly act get the backing of some traditional rulers, who benefit from the ransoms paid by oil companies to free their workers.
“The militants even warn companies not to reveal that they pay to get their abducted workers freed. They threaten us that if we reveal it the next time will be bloody,” he said, asking the government to take more drastic measures to stem the tide.
It was learnt that intelligence report revealed that the militants may have resolved to “go bloody” this time around, following reports that government plans to execute those caught in the act.
To make the state safer for oil and gas operators, Governor Rotimi Amaechi of Rivers State had on Monday revealed that hostage taking would soon be made a capital offence, punishable by death.
He disclosed that the state government planned to pass a bill into law which would make kidnapping a capital offence. The Criminal Code provides a two to 10 years imprisonment for kidnapping and false imprisonment.
Confirming the declaration of the force majeure on its Nigerian Bonny oil shipment, a Shell spokesman, Precious Okolobo, said the action was prompted by the company’s inability to meet contractual obligation owing to the militancy in the area.
“It was declared with effect 1800 hours on Tuesday due to logistics challenges related to the security situation in the area. It will affect the remainder of February and perhaps March offtakes with some deferred to April," he said.
The company said a previous force majeure covering liquefied natural gas (LNG) shipments from Bonny was still in force.
The MEND, the main militant group in the region, had called off a five-month-old ceasefire almost two weeks ago and warned of a "sweeping assault" on the Nigerian oil and gas industry.
Heavily armed militants had last month invaded the crude oil loading platform in Bonny, Rivers State, and shot at several vessels, which were carrying out businesses in the area.
A security source said the gunmen, who came in speedboats, stormed the platform at about 10pm and opened fire on an oil tanker, “Front Chief”, belonging to Total Oil Nigeria Limited.
It was learnt that despite the gunfire that was unleashed on the vessel, the crewmen braved the situation and refused to allow the militants to come on board.
Apparently angry, the militants reportedly went on the rampage and shot at other vessels that were within the precincts of the loading bay.
Some of the vessels and tugboats attacked within the loading terminal vicinity included Premier Njasi, MT Front Chief and two service boats: Wax Bill and MV Gabriel.
It was learnt that some of the militants that were patrolling the area beyond the loading bay, intercepted a tugboat, which was towing a barge from Bonny to Calabar, Cross Rivers State.
The militancy in the Niger Delta started in 2005 and has worsened since 2006. The development has robbed Nigeria of its position in oil production, as the country which had been producing about 2.5 million barrels of oil per day only produces about 2.2 million barrels owing to the violence in the area.
Shell, the worse hit, had prior to attacks on its facilities had been producing about one million barrel per day. But the development has reduced its production to only about 400,000 barrels per day.
Last November 27, the company had declared majeure on Liquefied Natural Gas, following an attack on its Soku gas plant.
Okolobo confirmed last week that the force majeure had not been lifted as the repair of the damaged plant is still ongoing.
"In recent months the number of illegal connections on pipelines has increased significantly and they are encroaching on the Soku plant itself, increasing safety risks to an unacceptable level," Shell Petroleum Development Company (SPDC) said.
SPDC Managing Director Mutiu Sunmonu said the company had had to remove more than 50 illegal valves in August and September last year alone.
"Over the last few weeks, the situation has deteriorated rapidly and resulted in a situation where safety concerns dictated we had to shut in. We also approached a stage where we have questions regarding the integrity of the pipeline which we will check," Sunmonu said.
SPDC is in a joint venture with the Nigerian National Petroleum Corporation (NNPC), Total's unit Elf Petroleum Nigeria Limited and Italy's Agip.
The Soku plant, located in the swamps of the southern Rivers State, supplies some 40 per cent of the gas feed to NLNG, a project in which Shell has a 26 per cent stake.
The Nigerian National Petroleum Corporation (NNPC) holds 49 per cent in NLNG. Other significant shareholders in the gas venture are Total and Agip. NLNG supplies liquefied natural gas to markets in Europe and the United States. LNG is natural gas that has been liquefied for easy transportation.
