With last week’s attacks on four oil tankers at the largest oil shipping terminal in Nigeria, the political risks surrounding oil in Nigeria may have increased. MEND, the “Movement for the Emancipation of the Niger Delta” has claimed responsibility for the attacks, which saw two Nigerian workers wounded. The group also warned local citizens to avoid the shipping terminals in the future, and promised further attacks.
Nigeria has been the eighth-largest producer of crude oil, though growing political unrest and the threat of attacks has lowered production to 2.1 million barrels per day, lowering it to the eleventh largest crude oil producer. Exxon Mobil (XOM) and Addax Petroleum (AXC.T) were the companies whose ships were targeted in the latest attacks, which sources have indicated were carried out by as few as 12 people. The militant group detonated explosives which set a small chemical tanker, the Arion, on fire. MEND, the group regarded as responsible for the attack, described itself as “freedom fighters,” and also advised foreigners to leave Nigeria.
Nigeria, which has been ruled by a series of repressive political regimes, has been heavily criticized in the world community for its ties with large oil companies which have allegedly enriched the rulers while the general population has seen little of this wealth. Large oil companies such as Exxon Mobil (XOM) and Royal Dutch Shell PLC (RDSA) have extensive operations in Nigeria.
The attacks by MEND may signal a new phase in their two-year campaign against the oil companies and the government of Nigeria. MEND claimed that they received assistance in the attacks from militants working in both the oil companies and the government. Crude oil on the NYM was trading at 94.15/barrel at midday, up $1.46.
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