Royal Dutch Shell Plc  .com Rotating Header Image

The Business: Shell field off Nigeria risks more delays

The Business: Shell field off Nigeria risks more delays

“Royal Dutch Shell’s flagship $2.7bn (£1.5bn, €2.2bn) Bonga project off Nigeria is believed to be suffering damaging delays, just a week after the company stunned investors by doubling the costs of its Sakhalin gas project to $20bn.”

Sunday July 24, 2005

By: Richard Orange

Royal Dutch Shell’s flagship $2.7bn (£1.5bn, €2.2bn) Bonga project off Nigeria is believed to be suffering damaging delays, just a week after the company stunned investors by doubling the costs of its Sakhalin gas project to $20bn.

The company last week signed up the accommodation vessel for project workers for an extra five months until March, indicating that considerable work is still needed on the floating production platform beyond the latest target for first production in October.

Jonathan Wright at Citigroup told The Business: “It’s very suspicious. It looks as though it’s potentially a risk.”

Shell said it still expected first production from the 225,000 barrel per day project in the third quarter this year, with the additional staff mainly needed for painting work.

But Robin Laird, president of Prosafe Offshore, which is supplying the floating hotel, said the vessel was needed to house staff to “assist with the further modification to the Bonga vessel itself. It’s being upgraded. There’s still lots more engineering to do.”

An analyst, who declined to be named, said: “It seems surprising that the company is maintaining its third-quarter forecast at the same time as it’s contracting this accommodation vessel for several months longer. It suggests it is still going to have a lot more people working to complete the final project than they would have expected. What they’ll do is they’ll commission it, get it producing and then they’ll shut it down again to finish it off.”

Bonga was initially expected to begin production at end-2003. Shell refuses to provide an update, but the $2.7bn initial cost of the project is believed to have soared to at least $3.5bn.

royaldutchshellplc.com and its also non-profit sister websites royaldutchshellgroup.com, shellenergy.website, shellnazihistory.com, royaldutchshell.website, johndonovan.website, shellnews.net and shell2004.com are all owned by John Donovan. There is also a Wikipedia article.

0 Comments on “The Business: Shell field off Nigeria risks more delays”

Leave a Comment

%d bloggers like this: