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Reuters: Fitch warns of Nigeria unrest impact on oil majors

Thu Jun 8, 2006

LONDON, June 8 (Reuters) – Continued unrest in Nigeria is likely to affect international oil companies’ attempts to develop hydrocarbon reserves in the country, credit ratings agency Fitch said in a report on Thursday.

Fitch said this would have implications both for companies such as Royal Dutch Shell (RDSa.L: Quote, Profile, Research), which has the biggest exposure of oil majors to Nigeria, and Nigeria itself.

“Delayed development of projects involving these companies may put pressure on their reserve replacement levels and also medium-term production levels,” it said in the report.

“These projects are important for Nigeria in meeting its production targets and delays may result in levels of national production falling below those currently anticipated.”

A wave of violence against the energy industry has been sweeping the delta of southern Nigeria, where militancy is fuelled by poverty, lawlessness, corruption and struggles for control of a lucrative oil theft business.

On Wednesday, five South Korean gas workers were kidnapped in a bloody raid on a natural gas plant in the Niger Delta.

Alongside Royal Dutch Shell, Total (TOTF.PA: Quote, Profile, Research), Chevron Corp (CVX.N: Quote, Profile, Research), Eni (ENI.MI: Quote, Profile, Research) and ExxonMobil Corp (XOM.N: Quote, Profile, Research) also derive a significant proportion of their production from Nigerian operations, Fitch said.

© Reuters 2006. All Rights Reserved.

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