3rd UPDATE: Eni Shuts Down Output After Nigeria Line Sabotage
June 19 2009 - 12:11PM
Dow Jones News
Italian energy company Eni SpA (E) said Friday an oil pipeline
in Nigeria that feeds the Brass terminal was sabotaged and
production has been shut down, in the latest of a string of attacks
against oil companies in the hydrocarbon-rich African country.
In a statement, Eni, Italy's largest energy company by market
value, said the total amount of production loss is currently about
33,000 barrels of oil a day, of which 6,000 barrels are Eni's
share, and about 2 million cubic meters of natural gas, of which
437,000 are Eni's. The sabotage took place between Thursday and
Friday and production was immediately shut off, the Rome-based
company said. Output is currently still down. No timetable for when
it would restart has been given. Earlier Friday, the main militant
group in Nigeria's Niger Delta, the Movement for the Emancipation
of the Niger Delta, said it blew up the pipeline.
Militants have escalated attacks on the oil industry in
retaliation for an army offensive that started mid-May.
In an email, MEND said "a major pipeline which delivers crude
oil to the Brass export terminal was blown up at the Nembe creek in
Bayelsa state this morning Friday" by its members.
It said the pipeline belongs to Agip, a unit of Eni. The Brass
facility has a capacity of around 160,000 barrels a day.
Last month, Eni declared force majeure - a legal protection
clause for not meeting contractual obligations to customers - on
52,000 barrels a day of crude from the Brass terminal.
The company said the force majeure, which was lifted after a
week, was due to pipeline damage, without specifying if it was
sabotage.
Chevron Corp. (CVX) and Royal Dutch Shell PLC (RDSB.LN) have
also been attacked by the militants. One attack alone in May cost
Chevron 100,000 barrels a day in lost production.
In total, Nigeria estimates 1 million barrels a day of its
output is down due to unrest but also to oil theft and lack of
maintenance.
-Benoit Faucon and Liam Moloney, Dow Jones Newswires; +44 20
7842 9266; benoit.faucon@dowjones.com
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