Militants Hit Oil Supplies in Nigeria

By WILL CONNORS and MICHAEL ALLENWARRI,

Nigeria -- Militants attacked two installations operated by Anglo-Dutch oil giant Royal Dutch Shell PLC in the Niger Delta on Monday, sending world oil prices higher and complicating government efforts to bring peace to the region.

Two oil-well clusters supplying Shell's Forcados oil-export terminal in Delta State were bombed by militants, spokesmen from Shell and the Nigerian military confirmed, just days after Nigerian President Umaru Yar'Adua unveiled an amnesty offer to militants.

"Some production has been shut in as a precautionary measure, while we investigate to determine what really happened," a Shell spokesman said. He didn't specify the amount affected by the bombings.

Another oil-company manager based in the region said the effect was severe, closing down at least 100,000 barrels a day in exports in Shell's western Delta region and further crimping Nigeria's oil output.

"We can't produce because we don't know what it did to the infrastructure, " the manager said. "It's pretty catastrophic, both financially and environmentally.

"On Monday, crude oil closed at the highest point in 2½ weeks, as traders reacted to supply threats. Light sweet crude for August delivery settled at $71.49 a barrel, up 3.4% on the New York Mercantile Exchange