1. (U) After surveying the pipeline fire at their Opobo
terminal line in Rivers State, Shell Petroleum Development
Company (SPDC) closed their Bonny terminal supply line in an
attempt to quench the fire faster. (Note. Previously, SPDC
had shut down two flowstations in hopes that their temporary
closure would be sufficient to bring the fire under control.
End Note.) Total loss in production is now estimated at
180,000 barrels per day (BPD), and the company has not yet
released a revised timeline for reopening the three lines
currently closed down. Current reports also indicate a
Nigerian National Petroleum Company (NNPC) production
pipeline in Edo State was severed in what appears to be a
botched bunkering attempt.



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Shell Attempts Cleanup After December 19 Attack


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2. (SBU) On December 21, SPDC and GON pipeline repair teams
surveyed the site of the Opobo pipeline attack reported
reftel. As a result of the protracted fire, SPDC decided to
shut down their Bonny terminal refining supply line, as the
continued operation of that line literally was adding fuel to
the fire. Previously, SPDC had temporarily closed two other
lines in an attempt to bring the fire under control. The
company has not released further information and hopes of
containing the fire and bringing the lines back into
operation by the end of the week may have to be revised.
SPDC has already declared force majeure. The Bonny line
carried an estimated 10,000 BPD, bringing total loss of
production to roughly 180,000 BPD.



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NNPC Pipeline Sabotage in Edo State


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3. (U) In what appears to be an unrelated event, an NNPC
production pipeline near Ehor, Edo State was reportedly
damaged in a failed bunkering attempt. The Uhumnwode local
government chairman, Ehosa Ogbemudia, said five people died
in the explosion. He described thieves bypassing NNPC
security, cutting into a section of pipe, and then fleeing
when their cutting ignited an explosion. Ogbemudia claims
the bunkerers had brought a barge and siphoning equipment
that burned in the fires. An NNPC official confirmed the
incident but refused to give any details or make any
speculations regarding the identity of the perpetrators.



4. (C) Chevron Security Advisor Hamish MacDonald believes
the two incidents may be relateed. He said that this
incident, coupled with the attack on the Shell pipeline,
looked as if messages were being sent to the Federal
Government by groups upset with GON efforts on international
cooperation and security initiatives in the Delta region. He
specifically named the U.S.-GON working group agreements and
the Rivers State Sustainable Development Strategy launch in
London. While he had no information that the two attacks
were coordinated, he did not discount the possibility.



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Workers Take Wait-and-See Approach, Prolong Chevron Dispute


--------------------------



--------------------------





5. (C) Peter Esele, currently acting President of the
senior oil workers' union PENGASSAN, said workers were more
concerned with an ongoing labor dispute with Chevron than
over the pipeline mishaps. Workers, he said, felt the
pipeline attacks were part of an ongoing battle between
government and Delta militias, a battle in which PENGASSAN
was not a direct protagonist. Thus, PENGASSAN would wait a
bit before assessing risk to workers in the area. Esele
asserted that frustration among PENGASSAN members who were in
Chevron mid-level management had created impetus for a
general strike that could have a serious impact on fuel
production and prices. Chevron initially bypassed
negotiating with these managers, instead pursuing resolution
of a labor dispute over salaries, bonuses, educational
assistance, and other benefits directly with the Ministry of
Labor.



6. (C) Chevron claims the disagreements arose from
fundamental differences in methods of measuring compensation.
They characterized their current strategy as "hardball" but
predict resolution some time in January. They believe there
will not be an "union overaction." PENGASSAN leadership also
hopes to avert a strike, but the death of their former
President, Uche Okoro, in the December Sosoliso Airlines
crash hurt PENGASSAN, further creating a temporary leadership
vacuum that delayed meeting with Chevron. However, a meeting
between Chevron and PENGASSAN will be held today.



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Comment


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7. (C) While the incident in Edo State may be a separate
botched bunkering, the timing of the incident right on the
heels of the December 19 attack in Rivers has many people
thinking this is more than coincidence. Nigeria was
initially jolted by the dint of plane crashes. Now it has
two major pipeline incidents within days of each other.
Often, the end of a year is a politically tense period in
Nigeria. These latest events will contribute to the
country's end-of-year jitters, and more directly to the
point, they underscore the fraility of the security in place
to protect Nigeria's vital oil production sector.
BROWNE