Chevron Pulling Out Hundreds of Nigeria Oil Workers
LONDON May 11, 2007 (Dow Jones Newswires)
U.S. oil major Chevron Corp. (CVX) will immediately begin withdrawing hundreds of workers and contractors from Nigeria's offshore waters due to recent militant violence against foreign companies in Africa's biggest oil producing country, a company official said Friday.
"These actions are beginning as we speak," the Chevron official told Dow Jones Newswires, declining to be named.
The official said the company's actions were not seen affecting Chevron's Nigeria oil production, which has already been sliced recently due to militant attacks.
The official said the company's moves were a "temporary suspension of non-essential" work but added that the number of workers impacted would be in "the hundreds." Many of the affected workers are contractors, the official said.
The withdraw of many Chevron workers from their normal operations marks a sharp escalation of events the past two weeks in Nigeria where militants and criminals have abducted dozens of foreign oil workers, including a number of Chevron's, and felled oil production by bombing energy infrastructure.
Chevron's announcement comes as militants, which include those seeking increased control of local resources and local thugs, pledge more attacks against foreign oil companies ahead of the West African country's presidential inauguration on May 29.
The Chevron official said it was unclear exactly how the San Ramon, Calif.-based company would maintain ongoing oil production but that no workers would be taken off production rigs which would allow output to continue.
Workers on several drilling rigs, construction barges, and support vessels will be out on "temporary standby." The actions come after four recent attacks against Chevron, including two Tuesday.
The recent violence has pushed up global crude prices and closed an additional 220,000 barrels a day of oil output in Nigeria over the past two weeks.
Total oil production shut in Nigeria is roughly 800,000 barrels a day, or about 32% of the country's effective production capacity of 2.5 million barrels a day. Oil prices this week in Europe have firmed about $2.00 to $66.50 a barrel.
Militants last week abducted six Chevron workers, who are still being held, and four other contractors on Tuesday who were working for the company. Chevron has shut 57,000 barrels a day of additional oil production due to the attacks. The company was producing about 390,000 barrels a day before the recent assaults.
Italian energy giant Eni SpA (E) and Royal Dutch Shell PLC (RDSA) have also been hit by the recent violence and attacks over the past year. An Eni official in Rome declined to comment on whether the company was mulling a withdrawal of workers. A Shell spokeswoman said the company's top priority is the safety of its staff but declined to comment on Shell's operations in Nigeria.
The group known as the Movement for the Emancipation of the Niger Delta, or MEND, has claimed responsibility for many of the recent attacks. It has waged an 18-month campaign against foreign oil companies and called for more violence ahead of the inauguration of incoming President Umaru Yar'Ardua.
The group, comprised largely of members of the Niger Delta's dominant Ijaw ethnic group, is bent on gaining control of local oil resources and demanding the release of two Ijaw leaders who are in jail on treason and corruption charges.
It has pledged to embarrass outgoing Nigerian President Olusegun Obasanjo and send a message to Yar'Ardua to come up with concrete plans for lifting millions of delta residents from abject poverty.
Analysts say the tenor of events in Nigeria point toward more violence and the prospect of more companies taking actions similar to Chevron's.
"It appears very likely (militants) will try to exert pressure on oil companies ahead of the inauguration," said Paul Adams, a London-based Africa specialist for global risk consultants Kroll Inc.
Yar'Ardua's election was the first democratic handover of power from one civilian leader to another in Africa's most populous nation but was disputed by many Nigerians and international observers because of alleged widespread vote-rigging.
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