Nigeria's Offshore Energy Projects Delayed By Piracy

Security has long been a headache for foreign oil firms including Royal Dutch Shell and Chevron operating onshore in Nigeria, where militants frequently bomb pipelines and kidnap expatriate workers.

But the distance to facilities in the deepwaters of the Gulf of Guinea had meant offshore sites were considered much less at risk.

A militant attack last June on Shell's Bonga oilfield - located more than 60 miles offshore - provided a wake-up call, ending the sense of relative security surrounding offshore sites.

The attack on the facility, which lies a distance from the shore of more than three times the width of the Strait of Dover separating England and France, forced Shell to temporarily stop production, cutting Nigeria's oil output by a tenth.

Industry executives estimate oil companies spend around $3.5 billion a year on security in Africa's most populous country.

Violence in the Niger Delta has cut a fifth of the OPEC member's oil output in the last three years. Addax Petroleum's country security manager Dennis Amachree estimates about $3 billion of oil revenue has been lost due to shut-in production.

The industry has responded by heightening security measures at some of Nigeria's ports.

Oil loading onto shipping vessels at some terminals are now restricted to only daylight hours, delaying shipments.

Author: Ksenia Kochneva