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MarketWatch: Shell preparing to resume 47,000 barrels a day of output from Nigeria units

Last Update: 6:38 AM ET Nov 2, 2006

LONDON (MarketWatch) — Royal Dutch Shell (RDSB.LN) is preparing to restart operations at two oil pumping stations in Nigeria with a combined production capacity of 47,000 barrels a day that were shut for about a week after protesters occupied the stations, a company spokesman said Thursday.

“We’re preparing to resume production from Ekulama 2 and Belema,” Shell spokeswoman Caroline Wittgen told Dow Jones, referring to the pumping stations.

“There is no timeline (on the restart), but (it will happen) as soon as possible,” Wittgen said.

Villagers in the Kula community, between Rivers State and Bayelsa State, in the eastern delta, abandoned their occupation of the stations early this week.

They accused Shell of failing to meet the terms of an agreement to give them preferential contracts to provide boats and supplies used at the installations, but all parties reached a settlement late Monday.

Shell’s planned restart comes after Chevron Corp. (CVX) resumed its 13,000-barrel-a-day oil pumping station Tuesday in the same area. The company shut its Robertkiri pumping station as a precaution after villagers occupied Shell’s stations.

Wittgen said Shell’s Ekulama 1 oil pumping station, which was also occupied by Kula villagers but had already been shut several days before the unrest, would remain down. That facility has a capacity of 9,000 b/d.

Shell, the biggest international oil company in Nigeria, has had almost 500,000 b/d shut in the western delta since February due mostly to sabotage by militants seeking greater control of oil resources.

The volatile Niger Delta, in the south of the country, is where most of Nigeria’s oil is produced. Nigeria, Africa’s biggest oil producer, is currently producing about 2.1 million-2.2 million b/d.
Kula community leader Dan Opusingi said earlier this week after a pact was brokered by the Rivers State government with Shell and Chevron that the community would give the companies three weeks to implement the accord before possibly stirring up more unrest.
Shell runs its operations in Nigeria through the Shell Petroleum Development Corp.

Shell has a 30% stake in the SPDC, while the Nigerian National Petroleum Co. holds a 55% share. France’s Total SA (TOT) has a 10% in the SPDC venture and Italy’s Eni SpA (E) unit Agip SpA has 5%.

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