NIGERIA - Chevron Operations.

Chevron Nigeria operates the Escravos group of oilfields in the Niger Delta which have a nominal capacity of 520,000 b/d, but with 140,000 b/d shut in because of violence. Chevron will spend $2.5 bn in Nigeria this year. Its oil production capacity will be expanded to reach 850,000 b/d by 2010. In March/April 2003, the violence caused Chevron to close its operations and vacate its fields.

Chevron has more than 25 fields, mostly of the Escravos group in the Warri region. Chevron holds 40% of the JV and NNPC holds 60% in concessions covering 2.2m acres. Only one third of its production is onshore, where communities are often hostile, and the rest is in shallow waters. Problems Chevron has faced in onshore installations include violence, threats, kidnappings and theft - as in the case of Shell.

Benin River field came on stream in 1996 at 30,000 b/d and Ewan began producing in 1997 at 30,000 b/d. The offshore fields of Okan and Mefa are the sources of associated gas for a pipeline, on stream since late April 1997, feeding Nigeria's industry and power plants. Ewan, in the west of the Niger Delta, has cost $250m to develop. It had the potential to produce 100,000 b/d. Ewan's oil reserves have been estimated at more than 160m barrels. Gbokoda offshore field came on stream in April 1998 and its targeted production rate of 85,000 b/d was reached in 2001. Opolo came on stream in February 1998 at the rate of 23,000 b/d. Dibi field came on stream later.

Chevron's crude oils are blended into an export blend, Escravos, 36[degrees] API with 0.2% S, popular among Western and Asian refiners. It is shipped by SBM from the Escravos terminal. Perched on the mouth of the Niger Delta, the terminal has been improved.

The first of its fields, Okan found in 1964, has Nigeria's oldest offshore platform and still has the capacity to produce 50,000 b/d, excluding about 15,000 b/d of oily water. It has been a challenge since Chevron absorbed Gulf Oil's Nigerian operations in 1985. Gulf had poor maintenance. Government rules only allow 100 parts of oil per million parts of water - an average of 75 parts per month - to be pumped into the sea as the oil is filtered on the platform before being piped ashore.

In early 1992 Chevron began a five-year "Facilities Upgrade Project" to improve operations on the Okan platform, upgrade all of the JV's decaying infrastructure, and raise its safety and maintenance standards. In 1995 it completed a pipeline to its Benue River field, which came on steam in early 1996 with an initial capacity of 15,000 b/d. Several other finds have been developed and put on stream since then.

Chevron is a 20% partner in another Nigerian JV covering 600,000 acres, where Texaco (now part of Chevron) is the operator. It has a PSC and equity in deep-water blocks where its partners are Total and ExxonMobil. It is the biggest oil producer in Angola where it operates a big offshore venture, which was a Gulf Oil unit it bought in 1985.

On Feb. 5, 2005, Gen. Elias Zamani, in charge of the army and police in the Niger Delta, said his forces had stepped up security following an outbreak of violence at the Chevron oil terminal near Warri, which is key to Nigeria's oil output of 2.5m b/d. Zamani said a security guard had been killed in clashes on Feb. 4, but a spokesman for the local community said at least two protestors had been killed. The deployment of troops came just a day after a report issued by New York-based Human Rights Watch (HRW), which called on the government to pursue a comprehensive strategy to tackle theft of crude oil and stop the flow of small arms into the Niger Delta.

The report, "Guns, Oil, and Power in Nigeria's Rivers State", said the violence in Rivers State was primarily the result of a struggle between two local factions - the Niger Delta People's Volunteer Force (NDPVF) and the Niger Delta Vigilante (NDV) - for control over illegal oil revenues. HRW said the trouble had started on Sept. 27, 2004.

The petroleum industry is prey to organised gangs of heavily armed criminals who tap pipelines and siphon oil. Smugglers sell between 100,000-200,000 b/d of crude to foreign refineries. Profits from the trade have fed an arms race among pirate gangs and ethnic militias who ply the waterways of the Niger Delta. To help control the problem, the Nigerian navy has bought 15 patrol boats from the US to fight piracy and the smuggling of stolen crude. Four of the boats were received in late January. The remaining 11 will have been delivered before end-2005. These boats are made also to track down vessels used for illegal bunkering.