Lagos (Platts)--18May2009

Nigeria's main militant group threatened Monday to blockade key access
channels for fuel tankers as tension in the oil-rich Niger Delta continued to
escalate.

"We have ordered the blockade of key waterway channels to oil industry
vessels, both for export of crude oil and gas and importation of refined
petroleum products," the Movement for the Emancipation of the Niger Delta said
in an e-mailed statement.

MEND claimed Sunday to have blown up two major oil and gas pipelines in
the state. Sources told Platts that one belonged to the state-owned Nigerian
National Petroleum Corp. and supplied crude to the 110,000 b/d Kaduna
refinery, while the other was a gas pipeline operated by Shell that fed
natural gas to power plants in the region. The extent of the damage was
unclear.

The latest threat follows escalating gun battles that began last
Wednesday as the military's Join Task Force began raiding militant camps in a
bid to free hostages. Both parties claim to have inflicted heavy casualties on
the other.

While oil companies operating in the Niger Delta refuse to comment on
security issues, many industry sources have expressed concern about the
escalation in attacks and the short-term outlook for production.

Nigeria's white collar oil workers union Pengassan over the weekend
called for an end to the violence that has plagued the restive region for
several years. "Pengassan have reasons to empathize with the Niger Delta
people in their legitimate demand for a fair and egalitarian society and for
socioeconomic emancipation of the region in terms of the resources accruing
from the area," the union said in a statement.

"We, however, differ on the approach of channeling our grievances and
mounting pressure, particularly when such approach is directed and targeted on
unsuspecting and innocent oil workers," said the union.

The union had Friday said it had no immediate plans to pull members out
of the Delta.

Nigeria, the world's eighth-largest oil exporter, is already suffering
huge losses because of insecurity in the region. Platts' latest estimates show
that output now stands at 1.7 million b/d, above its OPEC quota but below
installed capacity of 3 million b/d.
Oil revenue has fallen to around $1.2 billion/month so far this year,
down more than 50% from last year's monthly average of around $2.2 billion,
largely due to the fall in global oil prices, junior finance minister Remi
Babalola said early May. Oil accounts for more than 80% of Nigeria's revenue.
--Staff, newsdesk@platts.com