N'Delta: Oil Firms Frt over Attacks


Stakeholders in the Nigerian Oil and Gas Sector have expressed concern over the decision by the Movement for the Emancipation of the Niger Delta (MEND) to suspend the ceasefire it called last year in response to the Federal Government’s amnesty programme.
Some top officials of oil companies spoken to last weekend said the development portends a great danger not only to the International Oil Companies whose operations have been hampered due to years of violence in the Niger Delta region, but to the economy of Nigeria since oil remains the mainstay of Nigerian economy.

They regretted that the threat is coming at a time that companies are almost completing repair of their pipelines that were damaged in the wake of the violence and also given the fact that production is on the increase.
The heightened insecurity last year forced companies operating in the region to suspend further deployment of expatriate workers to sites. Also, the cost of doing business tripled as companies had to pay more to hire foreigners due to the level of insecurity.
Sources said cost of repairs for oil companies was pushed up to almost $400 million last year, from an average of $2.2 million in 1999.

The attacks on oil installations drastically reduced Shell's production capacity for years as the Royal Dutch Company and Chevron were forced to shut some chunk of their crude oil production in the wake of the attacks, while their expatriates workers flee the country due to the heightened insecurity in the region.
Nigeria’s crude oil production had been reduced to about 1.3 million barrels per day from near 2.6 million barrels in February, 2006. But following the October 4, 2009 implementation of the federal government’s amnesty to thousands of militants who surrendered their weapons, resulting in a ceasefire, crude oil production including condensate had increased to about 2.4million.
Citing production losses due to violence in Niger Delta, Shell Chief Executive Peter Voser, about a fortnight ago said the company will no longer look to its Nigerian operations to drive growth in its oil and gas output.
He said Shell will shift oil output growth to other region.

" Nigeria is still a heartland for Shell, but we no longer depend on it for our growth aspirations. This gives us more flexibility in deciding when and how to develop oil and gas resources in Nigeria ," he said.
Shell, which has been the dominant force in Nigeria ’s oil industry for decades, may be looking to dramatically reduce its presence in the country.

The Shell Petroleum Development Company of Nigeria Limited, Total Exploration and Production Limited and Nigeria Agip Oil Company last week reached an agreement to jointly transfer 45 per cent stake in three production licences and related equipment in the oil-rich Niger Delta held by the multinationals to a consortium led by two Nigerian companies. The transaction, which requires the consent of the Nigerian National Petroleum Corporation, which holds the balance of 55 per cent in the leases, as well as the federal government's approval, is expected to be completed within the next six months.

The agreement covers Shell's 30 per cent interest, Total's 10 per cent and Agip's five per cent stake jointly held with the NNPC under a Joint Operating Agreement in oil mining leases 4, 38 and 41. The buyer is Seplat Petroleum Company Limited, a Nigerian consortium jointly owned by two Nigerian firms - Platform Petroleum Limited and Shebah Petroleum Development Company Ltd - along with Maurel & Prom of France .


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