Shell Nigeria Shuts Output at Three Oil Platforms

Angry villagers in Nigeria stormed and seized three Shell oil platforms Wednesday in the volatile Niger Delta, forcing oil production to be shut down at each, the oil company said.

Royal Dutch Shell PLC (RDSA) officials declined to say how much oil had been cut off after the platforms were attacked. Chevron Corp. (CVX) said it shut down a platform in the area as a precaution.

Shell said in statement members of the Kula community living near Shell's Ekulama 1, Ekulama 2 and Belema oil pumping stations invaded the facilities Wednesday, accusing the oil giant of failing to meet the terms of an agreement to provide them aid.

"We had to shut the facilities," the statement said, giving no other details.

Femi Odumabo, a spokesman for Chevron in Nigeria, said his company shut down its Robertkiri platform in the same area after protesters took over the Shell installations.

"Our action was pre-emptive. We shut down because we didn't want them to take over our facility," said Odumabo.

He said Rivers State government officials in charge of the area were holding negotiations with the protesters to address their grievances.

It was not immediately clear what happened to the people who were working on the Shell platforms at the time.

Despite sitting atop much of Nigeria's oil reserves the inhabitants of the southern oil region remain among the most impoverished in the country. With little or no influence on the government they frequently turn to oil companies who run joint ventures with the Nigerian state with demands for jobs, schools and electricity.

Over the last decade, villagers have often stormed oil facilities to protest against oil companies they believe are taking wealth from their land and giving little back. Most such seizures have ended peacefully.

This year, armed militia groups who claim to be fighting for similar causes have increased attacks on oil installations and seized foreign oil workers as hostages either for ransom or to back demands for more local control of oil wealth.

Attacks by armed militants in Nigeria's oil region have cut more than a quarter of the country's oil exports since the beginning of this year.

The Brussels, Belgium-based International Crisis Group said in a report Wednesday that Nigeria was "faltering," citing violent political, ethnic and religious unrest currently sweeping the country as symptoms of "a deeply flawed" federal system.

Lack of a genuine structure for sharing power has fueled what the group described as "dangerous rivalries" and aided the emergence of armed, ethnic militia groups especially in the delta.

Nigeria is Africa's biggest oil producer and the fifth-biggest source of U.S. oil imports, exporting an average of 2.5 million barrels a day.

Copyright (c) 2006 Dow Jones & Company, Inc.