Chevron Cuts Production Because of Nigeria Unrest

The Nigerian unit of U.S. oil company ChevronTexaco Corp. said Sunday that it had shut all operations in the western Niger Delta because of ethnic fighting in the area.

The action followed the San Ramon, Calif.-based company’s decision to relocate its workers from the Escravos export terminal and offshore platforms because of ethnic warfare ravaging the area, Chevron said.

Daily production losses total 440,000 barrels of crude oil and 285 million cubic feet of gas, in which Chevron has a 40% equity interest, the company said.

With the addition of the latest shutdown, which comes after militant ethnic Ijaw youths threatened to blow up oil facilities in the Niger Delta, oil-dependent Nigeria is losing about 29% of its 2-million-barrel daily output.

Ijaw fighters who are at war with their Itsekiri rivals said they would blow up crude oil pipelines, flow stations and target Chevron’s Escravos export terminal if the army deployed to end the violence continued to raze their villages.

Chevron, which has its main operations in the western Niger Delta, cut production by 140,000 barrels a day last week after fighting escalated around the Escravos facility.

“The safety of people is our absolute priority and the reason for our decision to shut in production and relocate our people and community members displaced by the crisis to safe locations,� Chevron Managing Director Jay Pryor said.

Nigeria’s biggest producer, Royal Dutch/Shell, was forced by the sporadic fighting to shut down production of 126,000 barrels a day. The company closed its Bonny Light and Forcados facilities Saturday.

Total Fina Elf of France said Saturday that it had shut its 7,500-barrel-a-day Upomami OML 57 facility as the ethnic bloodletting in the oil-rich but impoverished western delta continued unabated.