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Reuters: Nigeria pumps 2.4 mln bpd, sees 3 mbpd by year-end

Sun Jun 11, 2006 9:17am ET

KUALA LUMPUR, June 11 (Reuters) – Nigeria’s oil production stands at 2.4 million barrels per day and will approach 3 million bpd due to increased production from new deepwater fields, senior oil official Edmund Daukoru said on Sunday.

He also said he remained hopeful that the 550,000 bpd of production shut since February by militant attacks would return to service in a month, although he said operator Royal Dutch Shell (RDSa.L: Quote, Profile, Research) feared it would take longer to restore output.

“I hope it will be a month, but Shell says it will take a bit longer than that,” Daukoru, Nigeria’s minister of state for petroleum, told reporters. Past predictions that production would resume within a matter of weeks have not come to pass.

The Movement for the Emancipation of the Niger Delta launched attacks earlier this year that forced the closure of a quarter of all output from the world’s eighth-largest exporter, helping push oil prices above $70 a barrel. Shell said last week it had yet to send teams to its oilfields.

New output from Nigeria’s largely untapped deepwater regions is compensating for shut-in output, boosting production to 2.4 million bpd, Daukoru said. This is higher than the 2.29 million bpd figure estimated in a Reuters survey of analysts, consultants and industry sources for May, released on Friday [OPEC/O]

“We’re ramping up deepwater production … Deepwater is making up for conventional territory,” he said on the sidelines of the Asia Oil & Gas Conference in Malaysia.

Speaking in Seoul at the start of this week, Daukoru said Nigeria planned to boost its capacity by 1.5 million bpd by the end of 2007, helping meet strong demand growth in Asia and the United States that has fuelled a surge in prices.

Over the past year Nigeria, the biggest oil producer in Africa, has begun pumping oil from a host of new deepwater fields including Royal Dutch Shell’s 225,000 bpd Bonga development and ExxonMobil’s (XOM.N: Quote, Profile, Research) 150,000 bpd Erha field.

More developments led by Total (TOTF.PA: Quote, Profile, Research) and Chevron (CVX.N: Quote, Profile, Research) are expected to follow over the next two years.

The offshore fields have typically been immune to the kind of militant attacks that have shut production in the Niger Delta, but an unprecedented raid on a rig 40 miles offshore two weeks ago heightened fears about the safety of more remote facilities.

Daukoru, who is also OPEC president this year, said it was premature to predict what action, if any, OPEC would take at its next meeting, scheduled for Sept. 11 in Vienna.

The Organization of Petroleum Exporting Countries agreed last week to keep pumping as much oil as their customers want, but at around $70 the price is still in sight of all-time highs.

“The culture now is that volatile world markets means we don’t take huge steps. We will take measured steps and then see what the market reaction is,” Daukoru said.

© Reuters 2006. All Rights Reserved.

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