Sarah Simpson, a journalist reporting from Lagos, told Al Jazeera: "Shell are still investigating into Mend's report, but they are not yet able to comment on the situation.

"If indeed there has been an attack, it could be a significant pipeline. Most likely a pipeline carrying crude oil, which could affect Nigeria's oil exports.

"Mend's reports have been quite accurate in the past," she said.

Military confirmation

Mend said it had destroyed the Orubiri flow station on Tuesday with the help of another armed group, the Niger Delta Volunteer Force (NDVF).

A Nigerian military spokesman confirmed to Reuters news agency on Wednesday that there had been an attack on Royal Dutch Shell's oil flow station on Tuesday.

"It is feared the facility may have caught fire due to intense, sporadic gunshots and massive dynamite and bomb explosions," Lieutenant-Colonel Sagir Musa said.

Musa said no soldiers were killed in the attack, which involved an assault by eight gunboats.

Mend also denied claims on Wednesday that they had freed two South African workers taken hostage last week.

Musa earlier said in the southern city of Part Harcourt that the pair had been
released "without payment of ransom".

"This is a blatant lie," Mend said on Wednesday. "We challenge the army to produce the South Africans for the world to see.

"We still have custody of the two South African hostages who are doing well and will be released at the earliest convenience as previously stated," Mend said.

Expanding 'oil war'

Mend has threatened to expand its so-called oil war to states outside Rivers state, saying that its next big attack would be on an offshore oil rig. It told foreign workers that they should abandon their posts.

A number of armed groups have attacked major oil pipelines in the Niger Delta [AFP]


"After Rivers, the hurricane will be heading to the neighbouring states in the Niger Delta," the group said in a statement.

"Soldiers and oil workers are advised to abandon all oil facilities including the offshore rigs of Bonga and Agbami as we want to minimise casualties," Mend said.

Chevron's Agbami oilfield is Nigeria's newest oilfield. The facility, which started production in late July, is expected to pump about 100,000 barrels per day (bpd) by February.

Mend attacked Shell's $3.6bn Bonga oilfield in June, which lies about 120km from the coast, forcing the company to shut down the 220,000 bpd operation for several days.

Oil traders on Wednesday began taking notice of the escalating violence and that helped push prices above $94 a barrel in early trading.

The heaviest fighting between fighters and security forces in more than two years has spread to about 10 villages, but has so far remained in Rivers state, home to oil city Port Harcourt.

Some oil industry security sources estimate 100 people have died in the clashes.