LONDON/LAGOS, June 21 Royal Dutch/Shell
is considering a further reduction in its oil production in the
eastern Niger Delta, where decades of spills and oil thefts have
damaged the region's environment and the reputation of the
Nigeria's government wants more of its oil and gas owned
either by the state oil company or local firms, raising concerns
among foreign oil majors they may lose smaller assets for
nothing if they don't sell now, industry experts say.
Shell's Nigerian subsidiary, the Shell Petroleum Development
Co. of Nigeria Ltd. (SPDC), announced a strategic review of its
business on Friday, saying it would consult with its
international and Nigerian partners over the future of the 28
leases that produce some 750,000 barrels a day of oil.
Shell has already sold eight Niger Delta licences for a
total $1.8 billion since 2010. Earlier this week U.S.-based
Chevron Corp said it would sell five Nigerian
shallow-water oil blocks.
Foreign oil companies have suffered from widespread oil
theft and at-times difficult relationships with local
communities, driving up the costs of operating there, while a
long-delayed energy bill is stuck in parliament, adding to
Shell's review of its Niger Delta oil licences came
alongside a decision to go ahead with two other investments in
the west African country - the Trans-Niger Pipeline loop-line
(TNPL) and Phase Two of the Gbaran-Ubie gas project, which
together will cost around $3.9 billion.
The pipeline investment is aimed at better protecting it
against the thefts and sabotage it suffers. As recently as
Thursday this week, Shell shut the Trans-Niger Pipeline after an
explosion and fire at what it called a "crude oil theft point".
The Gbaran-Ubie gas project is slated to maintain supplies
to the Nigeria Liquefied Natural Gas plant and to the
Gbaran-Ubie power plant.
SPDC Managing Director, Mutiu Sunmonu said: "Today's
announcements demonstrate our long term commitment to Nigeria by
clearly signalling our intent for the strategic direction of
Shell in Nigeria."