Shell Moves Focus from Nigeria as Attacks, Abductions Continue
An article posted on Tuesday to Rigzone.com reported that Royal Dutch Shell’s Chief Executive Peter Voser said that Nigeria is no longer a focus for the company’s growth.
“Nigeria is still a heartland for Shell, but we no longer depend on it for our growth aspirations,” Voser wrote in comments posted to the company’s website Tuesday. “This gives us more flexibility in deciding when and how to develop oil and gas resources in Nigeria.”
Although Shell has been a force in Nigeria’s oil industry for decades, it may be looking to significantly reduce its presence in that country. Shell’s operations have long been hampered by acts of violence, kidnapping, and sabotage on infrastructure in Nigeria’s oil producing regions.
Voser’s statements happened to be posted to the website on the same day that four expatriate Shell contractors—three Britons and a Columbian—were kidnapped in the Niger delta when their bus was ambushed by gunmen. A driver was wounded and a policeman killed in the incident.
In addition, a Chevron oil pipeline was shut down over the weekend when it was sabotaged.
“Shell staff in Nigeria are doing a great job in this very difficult environment,” said Voser. “During 2009, sabotage and attacks on installations of the Shell Petroleum Development Corporation of Nigeria have again reduced production levels,” and delayed plans to reduce gas flaring, he said. In October, Voser said that Shell’s Nigerian output was down by 180,000 barrels per day compared to output before the violence began.
The violence continues despite a recent amnesty and an ongoing truce between the government and Niger Delta militants. Voser did point out that after the amnesty, oil production levels improved towards the end of the year, and its liquefied natural gas business is doing well.
However, Shell is seeking buyers for its interest in 10 of its oil fields worth anywhere from $4 to $5 billion, and with reserves of 100 billion barrels.
In the future, Shell’s production growth will be driven by such unconventional energy projects as the large liquefied natural gas and gas-to-liquids developments approaching completion in Qatar. The company has new projects under construction with a combined output of about one million barrels equivalent of oil and gas per day, and much of this will compensate for decreased output from Nigeria.