ABUJA Nigeria has lost some 47 billion dollars in revenue from oil firm Shell since 2006 due to cuts in output caused by rebel attacks, the firm’s boss in the country said Tuesday.
“The government of this country has lost some 47 billion dollars in revenue since 2006 as a result of production shut-in by SPDC (Shell Petroleum Development Company) alone,” Mutiu Sunmonu told a parliamentary meeting on a proposed oil law.
“We presently produce less than 30 percent of our capacity,” Sunmonu said, without giving further details.
Armed groups in the restive Niger Delta oil hub have since 2006 staged attacks on oil installations and kidnapped oil workers, forcing foreign oil firms often to shut down production.
The main group is the Movement for the Emancipation of the Niger Delta (MEND), which claims to be fighting for a greater share of revenues for the impoverished communities in the region.
This month it announced a 60-day ceasefire in response to an amnesty deal declared last month by President Umaru Yar’Adua.
Nigeria, the world’s eighth biggest oil producer, derives more than 90 percent of its foreign exchange revenue from oil exports.
The Anglo-Dutch oil giant Shell has the largest operation in Nigeria’s oil sector.
The Petroleum Industry Bill (PIB) being debated in the parliament, which has been criticised by foreign investors, seeks to reform the oil and gas sector and clean up Nigeria’s corruption-ridden and under-performing state oil firm.
The public hearing opened in Abuja on Monday with lawmakers of the Senate upper legislative house pledging to ensure that the bill would meet international standards and protect foreign investors.
International oil majors operating in the country and other interested groups in the industry were attending the hearing.
Sunmonu complained about the government’s poor funding of joint operations with oil majors.
“We suffer perennial shortfall in government funding and as a result, we cannot cope with our investment programme,” he said.
He expressed his company’s support for government plans to reform the oil industry. “We recognise and support the need for change. Events in the last few years have brought the need for change into even sharper focus.”
But the umbrella body for international and local oil majors operating in the country slammed the proposed petroleum law, saying that if passed in its current form, it would “adversely affect” investment in the oil and gas sector.
“We are indeed concerned that certain provisions of the bill create uncertainty that if passed in the current form will adversely affect the ability of the oil and gas industry to continue to invest in new exploration and production projects,” the Oil Producers Trade Section (OPTS) told the hearing.
If the bill is not reviewed, the “majority of the projects will not pass investment criteria,” OPTS chairman Basil Omiyi said.
The OPTS groups 14 oil and gas majors in Nigeria including Shell, ExxonMobil, Total, Agip, Chevron and Statoil.
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