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Incident at Exxon Terminal Tests Nigeria's Foundering Oil Output

Source: Reuters 5/19/2016, Location: Africa

Nigeria's oil production showed further signs of strain as intruders blocked access to Exxon Mobil's terminal exporting Qua Iboe, the country's largest crude stream.

Exxon Mobil said the terminal continued to operate even as the intruders blocked staff from gaining access from early morning hours. The incident is the latest in a string of attacks and other problems at the oil infrastructure in Africa's largest crude producer.

"Some unknown persons obstructed access to the bridge leading to (the terminal), thereby preventing our personnel and the public from conducting their legitimate businesses," a spokesman said in an email.

"A peaceful removal of the obstructions is ongoing," after intervention from government, security agencies and community leaders, the spokesman said, adding that Exxon "condemns this criminality."

Samuel Ayande, chairman of the Artisan Fishermen Association, which is in contact with various locals who have information about developments on the ground, said a threatening letter from militants was impacting Exxon's decision over staffing and operations at the terminal.

Exxon directed enquiries about militant threats to security agencies, though it said the company had "plans in place to assure the security of our personnel and assets."

The spokesman did not respond to earlier reports that the facility was emptied of crude or that Exxon had removed staff from the terminal.

Militant activity in the oil-rich Niger Delta has taken out some 500,000 barrels per day of crude oil production from other companies in Nigeria, pushing oil output in Africa's largest-producing nation to more than 22-year lows.

While President Muhammadu Buhari has extended a multi-million-dollar amnesty signed with militants in 2009, he upset them by ending generous pipeline protection contracts. He also cut the amnesty budget, which partly funds training for unemployed, by around 70 percent.

The Niger Delta Avengers, a little-known radical group which has claimed a string of attacks on pipelines, has warned oil companies to leave the region within two weeks and has said it wanted a greater share of oil revenues and an end to oil pollution.

An oil industry source told Reuters that key support staff were at the Qua Iboe terminal, but non-essential workers had been sent home.

The stream is currently under force majeure due to an earlier accident that damaged a pipeline and caused a spill, but sources told Reuters earlier this week that Exxon had been ramping up production.

Qua Iboe exports more than 300,000 barrels per day. While Nigeria's exports are typically close to 2 million barrels per day, they have fallen to below 1.4 million this month due to the attacks and issues.

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