CHEVRON'S NEW OFFSHORE FACILITY BRINGS OIL

S E C R E T SECTION 01 OF 02 ABUJA 001509

SIPDIS

SENSITIVE
SIPDIS

DOE FOR CAROLYN GAY

E.O. 12958: DECL: 07/13/2017
TAGS: EPET ENRG ASEC PREL NI
SUBJECT: CHEVRON'S NEW OFFSHORE FACILITY BRINGS OIL
PRODUCTION GAINS AND SECURITY RISKS

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Classified By: Ambassador John Campbell for reasons 1.4 (b and d)


1. (S) SUMMARY: Ambassador Campbell on June 18 met with
Chevron's Chief Nigeria Security manager Peter Williams to
discuss Chevron's operations in the Niger Delta region and
security challenges facing oil production. Williams outlined
Chevron's Agbami production system scheduled to come online
in December 2007, and security vulnerabilities facing this
facility. END SUMMARY.


2. (SBU) On June 18, Chevron Nigeria security manager Peter
Williams shared details regarding Chevron's Agbami production
system, which is scheduled to come online in December 2007.
The Agbami system consists of a series of sub-sea wells
connected to a central Floating Production Storage and
Offloading (FPSO) vessel located seventy nautical miles off
the Nigerian coast. FPSO Agbami will increase Chevron's oil
production in Nigeria by 250,000 barrels-per-day (b/d),has a
2.25 million barrel storage capacity, and is 250 meters in
length. Oil tankers will load via nearby single point
moorings (SPMs). The facility supports a live-in crew of 150
personnel, 50 of which would be expatriates. Chevron expects
to begin installation in early August, estimating it will
take three months to tow the FPSO into position.


3. (S) Williams noted that FPSOs and other offshore
facilities, while located far offshore, remained vulnerable
to attacks by Niger Delta militants as seen by the May 1
attack on Chevron's FPSO Olobiri offshore Bayelsa State. The
Nigerian government allowed Chevron to designate a 500 meter
radius from the FPSO Agbami's bow as a restricted area which
is patrolled by the Nigerian Navy. The FPSO was retrofitted
to harden it against militant attacks, with onboard sensors
to warn against objects approaching the FPSO. Unlike FPSO
Olobiri, FPSO Agbami is self-correcting to wind and wave
conditions and therefore does not require a pullboat tug to
reposition the FPSO.


4. (S) Chevron is reconsidering its security strategy for
FPSOs and Williams identified several vulnerabilities FPSO
Agbami faces. First, Williams assessed that FPSO Agbami's
self-correcting capability was a security boon because
militants would be unable to hijack a pullboat tug and use it
to board the FPSO as they had done in the case of FPSO
Olobiri. However, FPSO Agbami would sit low in the water
when fully loaded leaving militants the possibility of
boarding the FPSO by rope.


5. (S) A second vulnerability is defending the restricted
area surrounding the FPSO. Chevron favored having a patrol
vessel police the restricted area over putting Nigerian
government security forces (GSF) onboard the vessel. A
patrol vessel could be a security risk if militants hijacked
the vessel and used it as a "Trojan horse" to board the FPSO.
Chevron could instead employ go-fast boats to patrol the
FPSO and decamp to shore at the first sign of militants to
notify the Nigerian Navy, who would then arrive with
reinforcements. The alternative of using GSF onboard the FPSO
had the potential to invite firefights between GSF and
militants. Chevron did not consider private security
companies (PSCs) as an alternative to GSF and Chevron would
not use PSCs for physical facility security but might use
them to procure equipment such as patrol vessels. (COMMENT:
Poloff discussed oil companies' use of PSCs with a Nigerian
former Chevron security official who indicated oil companies
operating in the Niger Delta, including Chevron, used PSCs to
provide unarmed guards to secure facilities. In his comment
about Chevron's use of PSCs, Williams probably meant Chevron
would not use PSCs to provide armed personnel to secure
facilities in lieu of GSF).


6. (S) Regarding FPSO Agbami's vulnerability to munitions
such as rocket propelled grenades (RPGs),these weapons could
cause significant damage, but probably would not destroy the
FPSO. While the FPSO was technically complex, it would be
relatively simple to sabotage since key onboard facilities
were clearly marked. Williams did not assess there to be a
significant Al-Qa'ida threat to Chevron's operations in the
Niger Delta.


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7. (S) COMMENT: Over the next several years, most of
Nigeria's new oil production will come from offshore and
deepwater wells. The Gulf of Guinea region is a testing
ground for international oil companies (IOCs) who use new
offshore technologies such as sub-sea drilling applications
and FPSOs, and the Nigerian government has offered IOCs
preferential contract terms as incentives for offshore
drilling. Security probably will be a key factor in
determining the degree to which IOCs will develop these
technically challenging reserves as militants prove their
ability to reach facilities farther offshore.
CAMPBELL