US embassy cable - 03ABUJA554

UNCLAS SECTION 01 OF 02 ABUJA 000554 
 
SIPDIS 
 
 
SENSITIVE BUT UNCLASSIFIED 
 
 
CAIRO FOR MAXSTADT, TASHKENT FOR BURKHALTER 
PARIS FOR OECD/IEA 
 
 
E.O. 12958: N/A 
TAGS: EPET, CASC, PINS, ASEC, PREF, PGOV, PHUM, NI 
SUBJECT:  NIGERIA: VIOLENCE ESCALATES IN ESCRAVOS 
 
 
1.  (U) Proprietary information in paragraphs 3-4.  Please 
protect accordingly. 
 
 
2.  (SBU) Summary: Escalating violence between Ijaws and 
Itsekiris have combined with security inadequacies to force 
ChevronTexaco and Shell to halt some operations, reducing 
Nigeria's crude production by  350,000-400,000 bpd.  If the 
unrest spreads, oil production could fall further, impacting 
negatively both U.S. energy security and Nigeria's political and 
fiscal stability.  Several thousand persons are now IDPs.  There 
are no reports of AmCit injuries.  End summary. 
 
 
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LOST PRODUCTION 
--------------- 
 
 
3. (SBU) On March 20, Sola Omole, ChevronTexaco's Manager of 
Government and Public Affairs, told EconOff that ChevronTexaco 
had shut down its operation in Escravos, halting production of 
nearly 140,000 bpd of crude oil, almost 50 percent of its 
production from that area.  He mentioned that Shell had also 
temporarily reduced production by 126,000 barrels of crude per 
day. However, British High Commissioner Thomas told Ambassador 
Jeter on March 22 that Shell was losing up to 250,000 barrels 
daily. Omole confirmed one of the company's catering staff had 
died two days earlier of gunshot wounds; another six employees 
were injured.  All are Nigerian nationals.  As of March 20, the 
GON had deployed about 150 troops to the Escravos area since the 
violence began on March 17 and another 1,000 troops to the Warri 
area, where there is similar unrest. 
 
 
4. (SBU) To the above-mentioned lost production should be added 
unknown losses (by some estimates just over 30,000 bpd) from the 
closure of a TotalFinaElf flow-station in the area.  In short, 
Nigeria's production seems to have fallen by roughly 350,000- 
400,000 bpd within the past five days. Omole warned (septel from 
Lagos) that ChevronTexaco might reduce its production by another 
300,000 bpd in the days and weeks ahead if progress could not be 
made in defusing the inter-ethnic conflict. 
 
 
5. (SBU) COMMENT: It is difficult to estimate production losses 
accurately and harder still to predict future cuts.  The joint- 
venture companies (JVs) in the Nigerian petroleum sector tend to 
declare force majeure swiftly when confronted by violence in 
production areas, not just to protect against future claims by 
customers, but also to put pressure on the GON to defuse the 
underlying tensions.  END COMMENT. 
 
 
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BACKGROUND 
---------- 
 
 
6. (SBU) On March 2, an Ijaw group, the Federated Niger Delta 
Ijaw Communities, had threatened mass protests on March 10 if the 
Government of Nigeria failed to meet their demands.  These 
included withdrawal of troops from Warri (the troops were keeping 
the Ijaw militias from attacking their less well-armed ethnic 
opponents), redrawing electoral boundaries in Warri, examination 
of land ownership, and redistribution of oil revenues.  The Ijaw 
ultimatum ordered the oil companies to leave the area since the 
Ijaws' dispute was with the GON. 
 
 
7. (SBU) Because of the violence, ChevronTexaco and Shell began 
evacuating non-essential employees. Omole said crew changes had 
been put on hold. An indicator of how tense the situation was 
this week was that a helicopter evacuating Shell employees was 
fired upon. Following this incident, all the air carriers serving 
Warri and environs -- Aero Contractors, Dana, Bristow 
Helicopters, Pan African Airlines, and Associated Airlines -- 
temporarily halted flights. 
 
 
--------------------------- 
IMPACT ON LOCAL COMMUNITIES 
--------------------------- 
 
 
8. (SBU) Omole said 2,000 internally displaced persons (IDPs) 
(almost all Itsekiri fleeing the better-armed Ijaw) had taken 
refuge at ChevronTexaco's Escravos tank farm as of March 21. 
Omole had heard but could not confirm that ten villages had been 
destroyed.  During March 18-21, Chevron evacuated many IDPs to 
Warri via air.  Because ChevronTexaco must deal with remaining 
IDPs at Escravos, it deferred evacuating those  employees who 
were helping with the displaced persons until March 21-22, when 
the Ijaw attacks intensified.  The Ijaws reportedly have 
complained that ChevronTexaco is impeding their efforts against 
the Itsekiri, but, thus far, have apparently have not 
specifically targeted ChevronTexaco employees, and they have not 
attacked the tank farm itself. 
 
 
----------------------------------- 
MINIMAL CONFLICT RESOLUTION EFFORTS 
----------------------------------- 
 
 
9. (SBU) According to Omole, no GON authority appears to be 
engaged in conflict resolution with the Ijaws. He confirmed that 
the British High Commission and Dutch Embassy were trying to see 
how they could help; he asked that Ambassador Jeter urge the GON 
to engage in talks with the warring parties.  Although the oil 
companies were being affected, Omole thought the attacks indeed 
were not directed against their operations and that GON 
engagement at a high enough level might be a useful measure to 
help restore production. 
 
 
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COMMENT 
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10. (SBU) This message should be read in conjunction with 
reporting from ConGen Lagos (where much of this message was 
drafted) and an Abuja septel reporting Ambassador Jeter's March 
21 midnight discussion with President Obasanjo. 
JETER