Oil supplies threatened as Nigerian violence fades

Negotiators worked to free four foreigners held hostage in Nigeria’s southern oil region as militants claiming to hold the captives said they would target oil installations if their demands were not met within days.

Amid rising violence, Royal Dutch Shell said yesterday that it had nearly doubled production cuts in Africa’s largest crude exporter, slashing output by another 115,000 barrels per day.

Meanwhile, crude oil prices gained today over threats to supply if sanctions were to be made against Iran, OPEC’s second-largest producer, over its nuclear ambitions. Disruptions in Nigerian oil supplies also fuelled gains.

Light, sweet crude on the New York Mercantile Exchange for February delivery rose as much as 60 cents to 66.91 dollars a barrel before receding to 66.78 dollars a barrel, up 47 cents.

Analysts say oil prices could rise above 70 dollars a barrel if the nuclear dispute between the West and Iran does not reach a quick resolution.

Initial reports from security agents and community leaders dealing with militants holding an American, a Bulgarian, a Briton and a Honduran in Nigeria’s Bayelsa state show “positive signals that the matter will soon be resolved amicably,” the governor’s office said in a statement.

A previously unknown group, Movement for Emancipation of Niger Delta, claims to be holding the oil workers, who were kidnapped when armed men attacked an offshore oil platform run by Shell last week.

Shell said Tuesday production cuts had risen to 221,000 barrels per day.

The militant group demands the release of militia leader Mujahid Dokubo Asari, who has been detained on treason charges since September. He has campaigned for regional secession and greater local control of oil wealth.

In Lagos yesterday a man identifying himself as Brutus Ebipadei and the group’s leader, threatened to escalate attacks on oil installations if the group’s demands are not met by Friday.

“Our demands remain the same and if they’re not met in two days we’ll give the full fireworks,” said Ebipadei.

The demand for the release of Dokubo-Asari and other detained ethnic Ijaw leaders form only part of their general objective, which is local control of oil wealth produced in the Niger Delta, he said.

“We have launched Operation Climate Change, and we’ll cripple Nigeria’s oil exports to prove that nobody can take our oil without our consent,” Ebipadei said.

It was not known how many fighters, if any, he controls.

Dokubo-Asari appeared in court yesterday, saying afterward that he supported open revolt in the oil-rich south.

“If it’s the decision of the Ijaw people to go back to armed struggle, it’s binding on me. I’m in total support,” he told reporters in the capital, Abuja.

He called on oil companies to leave the region.

“Oil has brought a lot of misery to the Ijaw and the Niger Delta. They should leave. If they don’t leave, the Ijaw people will make them leave, whether Dokubo-Asari is in prison or not,” he said.

Violence, hostage-taking and sabotage of oil operations are common in the oil-rich Niger Delta where the region’s impoverished communities fight for a greater share of the oil revenue flowing from their land. Hostages are rarely harmed.

Militant violence has escalated in the restive south, a desperately poor region despite Nigeria’s vast oil wealth.

Nigeria, Africa’s leading oil producer, exports 2.5 million barrels of oil daily and is the fifth-biggest source of US oil imports.

Shell said it has evacuated 300 employees from facilities in the western Niger Delta after heavily armed fighters attacked the company’s Benisede oil platform in the area on Sunday, killing a catering contractor and damaging the facility.

Four days earlier, gunmen had attacked Shell’s EA platform in shallow waters near the delta coast, seizing the hostages. A major Shell pipeline leading to its Forcados export terminal was blown up the following day.