STORM2K

Several killed as militants storm oil platform

16.01.06 12.40pm


LAGOS - Several people were killed when suspected ethnic militants stormed a Nigerian oil platform yesterday, extending a three-week spate of attacks which has hit output in the world's eighth-largest exporter.

Dozens of heavily armed men invaded Royal Dutch Shell's Benisede oil flow station in speed boats, exchanged fire with troops, torched two housing blocks and damaged oil processing facilities before leaving, authorities said.

Some attackers and soldiers protecting the platform were killed in the gunfight, a top military official said.

"There was an attack. There was a fight there, an exchange of fire," Brigadier-General Elias Zamani, who heads a military task force in the southern delta, said.

"We lost some soldiers and some of the other boys were killed also."

A senior oil industry official said four soldiers and two cooks working at the plaftorm were killed.

A diplomat said recent attacks and kidnappings targeting Nigeria's oil industry appeared to be co-ordinated by one group which has demanded more oil revenue for the Niger Delta and the release of two ethnic Ijaw leaders. It has theatened to halt Nigeria's 2.4 million barrels per day of oil exports altogether.

The previously unknown group known as Movement for the Emancipation of the Niger Delta said on Sunday it had 5000 active fighters.

"We seek control of our resources to improve the lives of our people," the email statement said. "We are committed to destroying the capacity of Nigeria to export oil."

It promised to carry out another attack shortly that would "set Nigeria back 15 years and cause incalculable losses".

Shell evacuated Benisede and three other flow stations after Sunday's attack, but oil output was unaffected because the stations were already closed after the suspected militants bombed a major crude oil pipeline nearby last Wednesday.

However, Sunday's attack will delay repairs to the 100,000 barrel-a-day Trans-Ramos pipeline, which had been expected to resume pumping to the Forcados tanker terminal on Monday or Tuesday, the senior industry source said.

"It may mean a prolonged outage," he said.

The firefight occurred as a team of government negotiators began talking to kidnappers, believed to be from the same group, who abducted four foreign oil workers from an offshore oilfield operated by Shell on Wednesday.

The contract workers - an American, Briton, Bulgarian and Honduran - are being held in the Agoro district of Bayelsa state, in the south of the country, a government spokesman said.

Colleagues of the captive workers said they feared a heavy-handed military response to Sunday's bloodshed could endanger their lives.

"With the human shield the militants have, such a high-handed approach could lead to disaster," said one.

The militant group has demanded the release of Mujahid Dokubo-Asari, an Ijaw militia leader who faces treason charges, and Diepreye Alamieyeseigha, a former delta governor who was impeached last month for money laundering.

"His alleged offences are indeed criminal in a sane society but ours is indeed insane. The president is a thief, so is his vice president," the group said.

By BRAD FOSS, AP Business Writer
Tue Apr 18, 2:08 PM ET

WASHINGTON - Oil prices reached a new high above $71 a barrel Tuesday as persistent concerns about Iran's nuclear program and supply disruptions in Nigeria overshadowed a new report from OPEC forecasting weakening global demand.

There was no fresh catalyst for Tuesday's buying, but analysts said the market psychology would likely remain bullish until there is some resolution to a variety of geopolitical uncertainties, particularly the West's nuclear dispute with Iran.

Global Insight oil analyst Kevin Lindemer said rising inventories of crude oil in the United States and signs of slower growth in consumption would typically help pull down prices, but "all of that is getting swamped right now by Iran and Nigeria."

Light, sweet crude for May delivery on the New York Mercantile Exchange surpassed the previous intraday record of $70.85, set Aug. 30, rising to $71.15, an increase of 75 cents from Monday's record closing price.

With gasoline prices averaging $2.79 a gallon, U.S. motorists are shelling out $212 million per day more than a year ago, and President Bush said Tuesday he was "concerned" about the impact this was having on American families and small businesses.

"We will feel real pain at the pump before this market tops out," said James Cordier, president of Liberty Trading in Tampa, Fla., who predicted prices could rise as high as $3.50 a gallon in some parts of the country this summer.

So far, demand for gasoline continues to rise, albeit at a slower pace, according to Energy Department data.

In its latest monthly report, the Organization of Petroleum Exporting Countries on Tuesday revised its demand-growth forecast for 2006 to 1.42 million barrels a day, down from 1.46 million barrels per day in the previous report. The cartel estimates that global crude-oil demand will be slightly above 84.5 million barrels per day — about half a million barrels per day lower than the current Wall Street consensus.

OPEC expressed particular concern about the impact rising interest rates would have on consumer spending in the U.S., where gasoline demand grew at a slower rate in the first quarter and could "carry over into the second half of the year."

Still, analysts said oil prices were likely to climb further as long as geopolitical risks in Iran and Nigeria posed threats to supply.

Crude oil production is only barely keeping up with rising global demand, leaving a slim margin for error if there is a prolonged supply interruption, experts say.

Traders are anxious that U.S.-led efforts to stop Iran, OPEC's second-largest member, from pursuing a suspected nuclear weapons program would lead to a disruption in Persian Gulf supplies.

And in Nigeria, militant attacks have led to the shutdown of crude oil production. Platts estimates Nigeria's output fell by 220,000 barrels per day in March, compared with February.

Also underpinning high oil prices is booming demand in emerging economies such as China and India.

"The market sentiment now is much more nervous," said Tetsu Emori, chief commodities strategist at Mitsui Bussan Futures in Tokyo. "Things haven't changed so much, but as we approach the summer driving season we'll need more crude to make gasoline and we know also that U.S. gasoline production has its limitations because of the tight refining capacity."

In London, Brent crude for June delivery at the ICE Futures exchange also hit an all-time high of $72.20 a barrel, before easing back to $71.73 — a 27 cent increase from Monday's close.

Gasoline futures Tuesday rose 5.53 cents to $2.25 a gallon while heating oil prices gained 0.11 cents to $2.0240 a gallon. Natural gas futures rose 21.3 cents to $7.79 per 1,000 cubic feet.

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AP Business Writer Jane Wardell in London contributed to this report.