(Corrects spelling of name in final paragraph)
* Oil unsold despite production close to 20-year low
* Avengers militant group vow "zero" output
* Refiners put off by force majeure, loading delays
By Libby George
LONDON, June 8 (Reuters) - Refineries from India to theUnited States are backing away from buying Nigerian oil amidheightened uncertainty about deliveries as the country squaresup to militants in the restive Delta region.
Their reluctance to buy is limiting the prices Nigeria canget for its oil even as there is less of it - another hit to thefinances of a country battling its worst economic crisis indecades.
A group calling itself the Niger Delta Avengers has staged anumber of attacks on oil installations belonging to Shell, ENI and Chevron, pushing output inwhat is usually Africa's largest crude exporter down past20-year lows last month.
Some oil facilities have clawed back output, but the Avengerattacks have continued and the group has vowed to bring Nigerianproduction to "zero".
"Not everybody wants to be caught up in that, so they willavoid it," said Olivier Jakob, managing director of PetroMatrixin Switzerland. "The refineries will walk away from it."
India's HPCL was forced last month to cancel a vessel itchartered to carry 2 million barrels of West African crude dueto the Qua Iboe force majeure.
India's state-run Indian Oil Corp. Ltd - a major buyer ofNigerian grades over the past year - has stated in its recenttenders that it would not take grades under force majeure. QuaIboe remained off the list in its latest tender, according to adocument seen by Reuters, an extremely unusual development inits requests for sweet crude.
Indonesia's Pertamina, another frequent buyer, also chosenot to buy Nigerian grades in its recent tenders, favouringCongolese Coco, Angolan Girassol and Saharan Blend from Algeriainstead.
Traders said Pertamina had shifted its preferences since theviolence and uncertainty escalated, although Daniel Purba,senior vice president of ISC Pertamina, told Reuters by textmessage that Pertamina is "monitoring" Nigeria, but "currentlyit's still not affecting crude purchasing."
Four of Nigeria's oil grades - including the largest stream,Qua Iboe - have been under force majeure in the past month - alegal clause that allows companies to cancel or delay deliveriesdue to unforeseen circumstances.
ExxonMobil, which declared force majeure on Qua Iboein May due to an accident, lifted the declaration last week, butthe unpredictability is too much for some buyers.
The reduced demand means Nigeria is not benefiting as muchas others from a rebound in Brent crude prices, which is partlydriven by its own oil outages.
Even refineries on the U.S. East Coast, which have been on abuying spree for Nigerian crude in recent months that averaged240,000 barrels per day (bpd) in April and May, according toReuters shipping data, are starting to turn away.
"When you plan your crude run months in advance and commitbuying cargo, you need to be comfortable that the cargo will bethere when you go to lift," one U.S. east coast oil trader said.
As a result, differentials to dated Brent for Qua Iboe,Bonny Light and other grades are under downward pressure. Thereare several unsold cargoes for June loading, even with more thanhalf a million barrels of production missing.
The Nigerian government set up a team this week to launchdialogue with the Avengers, but the group, via their Twitterfeed, rejected the offer to talk and blew up another Chevronwell.
"The nature of the recently re-emerged militancy in theNiger Delta suggests it is here to stay for the foreseeablefuture," said Elizabeth Donnelly, assistant head of the Africaprogramme at Chatham House, a London-based think tank. (Additional reporting by Jarrett Renshaw in New York, NidhiVerma in New Dehli, Wilda Asmarini in Jakarta and Florence Tanin Singapore; Editing by Susan Fenton)
