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 ABUJA 00001509 001.2 OF 002 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. ABUJA 00001509 002.2 OF 002 ¶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