Saturday, June 28, 2008

The Bonga Offshore Oil Platform Attack

On the heels of this weekend's Saudi Oil summit, Nigerian production has dropped to the lowest level in 25 years. This was in part because militant attacks shut in as much as 345,000 barrels per day of Nigerian production in the past few days. The Nigerian militant group MEND (Movement for the Emancipation of the Niger Delta) has demonstrated a continuing ability to interrupt production from Nigeria's mature, onshore fields. However, the future promise of Nigerian oil is not onshore. Rather, it is the 1.25 million barrels per day of offshore production scheduled to come on line in the next 6 years. Analysts previously believed these offshore facilities were out of MEND's reach.

This assumption--that far offshore facilities are beyond the reach of militants--must now be reconsidered. The week's most successful attack, shutting in 225,000 barrels per day, came against Shell's Bonga facility. At 120 km offshore, the Bonga attack demonstrated a new militant capability in the offshore environment. As Nigeria is one of the few states with the geological potential to significantly increase oil production and exports, the Bonga attack may prove to be an extremely important development.

Offshore facilities are highly complex and vulnerable feats of engineering. While they are generally engineered to withstand extreme natural environments, they may not be well fortified against intentional attack. We do not know the extent of fortifications, as the specific security considerations and plans for each platform are not publicly available. It makes sense, however, that to the extent the threat from MEND was considered to be non-existent at the time that all scheduled Nigerian megaprojects entered development, fortification against attack was not a significant design criteria.
Full Monty at the Oil Drum. Be sure to read the conclusion and discussion of geopolitical feedback loops.