YOUTHS CONTINUE TO HOLD AGIP WORKERS; SHELL MOVES

UNCLAS LAGOS 001043 SIPDIS SENSITIVE BUT UNCLASSIFIED - HANDLE ACCORDINGLY SIPDIS STATE PASS DOE FOR GPERSON AND CGAY STATE PASS TREASURY FOR ASEVERENS AND SRENENDER STATE PASS DOC FOR PHUPER STATE PASS TRANSPORTATION FOR MARAD STATE PASS OPIC FOR CDUFFY STATE PASS TDA FOR BTERNET STATE PASS EXIM FOR JRICHTER STATE PASS USTR FOR ASST USTR SLISER STATE PASS USAID FOR GWEYNAND AND SLAWAETZ E.O. 12958: N/A TAGS: EPET PGOV ASEC PTER PINR NI SUBJECT: YOUTHS CONTINUE TO HOLD AGIP WORKERS; SHELL MOVES TO CONTAIN OIL SPILL IN RIVERS REF: LAGOS 1029 ¶1. (SBU) ConocoPhillips management, joint venture partner for AGIP, confirmed that local youths continued to hold approximately forty AGIP employees at an AGIP flow station in Bayelsa State (reftel). The AGIP employees have now been confined to the flow station for three days. ConocoPhillips reports no casualties. The AGIP Deputy Managing Director told us two negotiators from Bayelsa State and one from AGIP were negotiating with the community. He said part of the community's grievances stem from the Nigerian Navy's seizure of two boats from the village. Local press accounts indicate the community is dis-satisfied with AGIP's implementation of community development activities under their Memorandum of Understanding (MOU). ¶2. (SBU) Shell executives report the Bille community in Rivers State initially prevented Shell from accessing the Nembe Creek pipeline rupture (reftel). Shell now has access to the area, and crews are working to mitigate the significant oil spill. Once pollution prevention measures are in place, Shell will investigate whether the pipeline was deliberately vandalized or ruptured due to corrosion or other technical issues. ¶3. (SBU) Shell confirmed it has declared "force majeure" for deliveries of Bonny Light crude from their Bonny Island Export Terminal, saying they may have difficulty meeting some deliveries from late July through August. With international markets casting an increasingly worried eye at Nigeria, Shell emphasized their declaration is merely a precautionary market warning. A Shell executive told us they will make contracted deliveries of Bonny Light, but remain uncertain if they will reach the full quantity for all shipments. BROWNE