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S E C R E T SECTION 01 OF 02 LAGOS 000368 NOFORN SIPDIS DOE FOR GPERSON, CHAYLOCK E.O. 12958: DECL: 09/18/2018 TAGS: EPET, ENRG, PGOV, RS, NI SUBJECT: NIGERIA: SHELL CLAIMS PRODUCTION UNAFFECTED BY RECENT ATTACKS; COMMENTS ON GROWING VIOLENCE IN THE DELTA REF: A. LAGOS 365 B. LAGOS 366 Classified By: Consul General Donna M. Blair for reasons 1.4 (B) and (D ) 1. (S/NF) Summary: Shell's Vice President for Africa, Ann Pickard (strictly protect), said a September 13 attack on a Shell natural gas node in Rivers State may impact the supply of gas to Nigerian Liquefied Natural Gas (NLNG) plant, but she downplayed the impact of recent attacks on Shell's current oil production. She claimed former Rivers Governors Peter Odili and Celestine Omehia were behind the militant unrest in Rivers State and that current Rivers State Governor Rotimi Amaechi's lack of political connections forced him to fight rather than "co-opt" the militants as the Delta and Bayelsa State governors have done. Pickard asked what the USG knew about GAZPROM interest in Nigeria; and if we had any information on shipments of one to three surface to air missiles to militant groups in the Niger Delta. She alleged that a conversation with a Nigerian government official had been secretly recorded by the Russians. Post believes that the spate of recent attacks may have impacted Shell's oil production more than Pickard is letting on. End Summary. Shell Says Attacks Caused Little Impact to Production --------------------------------------------- -------- 2. (S/NF) In a September 18 meeting with Econoffs to discuss the attacks that occurred September 13-16 in Rivers State, Shell's Vice President for Africa, Ann Pickard, downplayed the impact of attacks on Shell's oil production. According to Pickard, most of the fields in the area were already shut-in due to pipeline breaks from attacks earlier this summer. She was concerned however, that the September 13 attack on Shell's Soku gas facility would hamper the delivery of natural gas to NLNG (Ref A). During the attack Soku was hit by two rocket propelled grenades and Shell is still assessing the extent of the damage. (Note: Pickard remarked that Shell had received two days advanced warning of an attack from another USG agency, but the information provided was too vague for Shell to act upon. End Note) 3. (C/NF) Pickard also thought she detected a troubling new development in least one of the recent attacks in Rivers State. In previous attacks in the western Niger Delta, militants had approached facilities via creeks and swamps using boats. In one of the attacks on September 14, militants crossed a significant amount of dry land to reach their target. Pickard was unsure if this was a one-off occurrence or a new militant tactic. She expressed concern that if the militants were willing to move over long stretches of dry land, oil facilities thought to be secure would be vulnerable to attack. On the JTF's performance, she noted the JTF was taking a more proactive approach to confronting the militants and increasing the use of helicopters to attack militant formations. Amaechi Lacks Capacity to Co-Opt the Militants --------------------------------------------- - 4. (C/NF) Discussing the politics behind the recent events in Rivers State, Pickard said Rivers State Governor Rotimi Amaechi lacked the connections among Rivers State militant leaders to successfully co-opt them as the governors in Delta and Bayelsa states have done with militants in their states. Amaechi has more groups of militants to deal with than does Delta State, where Governor Uduaghn has reached an agreement with Tom Polo, or Bayelsa State, where Governor Silva has reached an agreement with three of five groups. (Note: She did remark that Bayelsa State militant leader, "Boyloaf" was not one of the Bayelsa militant leaders that had been "settled". End Note.). In her view the clash between the JTF and militants was a proxy war for ongoing disputes between Amaechi and former Rivers State governors Peter Odili and Celestine Omehia, both of whom are closely connected to LAGOS 00000368 002.2 OF 002 militant leaders in the state. (Ref B) GAZPROM Making a Play for Shell's Concessions in Nigeria? --------------------------------------------- ------------ 5. (S/NF) Pickard asked for USG information on GAZPROM's interest in Nigeria. She had heard from contacts in the British government that the GON has promised GAZPROM access to 17 trillion cubic feet of natural gas. Pickard said that that amount of gas was only available if the GON were to take concessions currently assigned to other oil companies and give them to GAZPROM. She assumed Shell would be the GON's prime target. She discussed recent press reports of a memorandum of understanding between GAZPROM and the Nigerian National Petroleum Corporation and agreed it was likely more flash than substance. In an interesting aside, Pickard told Econoffs that she had recently held a meeting with an unnamed Nigerian minister in the minister's office. Shortly thereafter she said she received a verbatim transcript of the meeting "from Russia." (Comment: Pickard was a little coy on this subject. She did not name the minister and it wasn't clear who gave her the transcript. The implication was that the Russian government was actively collecting on Shell in Nigeria as well as one of Nigeria's ministries. Pickard routinely meets with the oil, gas, and defense ministers as well as top military leaders and senior advisors to the President. End Comment.) Shell Concerned About MANPADS in Niger Delta -------------------------------------------- 6. (S/NF) In another request for information, Pickard asked if we had any information about possible shipments of "surface to air missiles (SAMs)" to militants in the Niger Delta (Note: Presumably she is referring to man portable air defense systems (manpads) and not larger surface to air missile systems. End Note.) She claimed Shell has "intelligence" that one to three SAMs may have been shipped to Nigerian militant groups, although she seemed somewhat skeptical of that information and wondered if such sensitive systems would last long in the harsh environment of the Niger Delta in the care of groups not known for their preventive maintenance practices. When asked what aviation security steps Shell was taking, Pickard said Shell helicopters generally fly above the effective range of the small and medium caliber weapons used by militants. 7. (S/NF) Comment: In earlier conversations, Pickard has not always been forthcoming on oil production levels. Government spokesmen and other oil executives tell us Nigeria lost between 150-200,000 barrels per day of oil production because of the recent attacks in Rivers State. Chevron admits it lost 30,000 barrels of production. Which company then lost the other 120-170,000 barrels? The European oil companies have fields in Rivers and share pipelines with Shell, so it is possible that damaged Shell pipelines have cut off those fields. However, Chevron contacts have told us they believe eight Shell fields were taken off-line as a result of the attacks. Pickard has repeatedly told us she does not like to talk to USG officials because the USG is "leaky." She may be concerned that by telling us the true impact of the attack, more bad news about Shell's Nigerian operations will leak out. But in any case, her comments about the causes and methods of growing violence in certain areas of the Delta, particularly Rivers State, bear concern. End Comment. BLAIR