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Reuters: Shell to inspect damaged Nigerian oil facilities

28 Nov 2006 12:15:08 GMT
Nigeria violence
More  By Tom Ashby

LAGOS, Nov 28 (Reuters) – Royal Dutch Shell will soon take a first step to resuming 500,000 barrels per day of Nigerian oil output by sending inspectors to assess pollution and damage to facilities in the western Niger Delta, company sources said on Tuesday.

Shell executives attended a three-way meeting at the weekend with government officials and a militant group from the area. At the talks they agreed to start joint inspections of the facilities shut by a series of militant attacks in February.

“The agreement was that Shell can go back to the western Niger Delta where the security incidents have been,” a Shell source said, asking not to be named.

“It means we will go in and assess the extent of the damage to the facilities and determine the cleanup we have to do.”

The closure of the Forcados and EA oilfields in the western delta set a new standard for militancy in the Niger Delta.

It also cut output by Africa’s biggest oil producer by about a fifth, contributed to a surge in world oil prices and played havoc with Nigeria’s budget.

The militant group attending the meeting was the Federated Niger Delta Ijaw Communities (FNDIC), which has been linked to the group that claimed responsibility for the February attacks — the Movement for the Emancipation of the Niger Delta (MEND).

FNDIC spokesman George Timinimi said Shell had agreed to provide power generators, while the government had promised water, roads and hospitals to riverine communities around the abandoned facilities as part of the deal.

“There is nobody who does not like development so if Shell makes an effort I don’t see MEND deterring it,” Timinimi said.

MEND has consistently threatened to execute any oil workers found returning to the abandoned oilfields.

MEND, whose leadership is unknown, says it is fighting for more regional control over the delta’s oil resources and compensation for decades of oil pollution.

It responsed sarcastically to the latest developments.

“We will visit them at the appropriate time to formally welcome them back to those installations,” MEND said on Tuesday in an email to Reuters.

The planned inspections, by teams comprising company and government officials, are a prerequisite for Shell to resume pumping from the Forcados oilfields in the swamps around Warri and the offshore EA oilfield.

Some of the lost production, including the 115,000 bpd EA field, could be restarted within weeks after inspections, company sources said. But other facilities that were damaged in the attacks or vandalised since then could take several months to return to full volume, the sources added.

The February attacks marked an intensification of the conflict in the vast wetlands region of southern Nigeria, where militancy fuelled by poverty has been on the rise for decades.

Dozens of foreign oil workers have been kidnapped from oil facilities and residential compounds since the February attacks, mostly by ransom-seekers. Militants have also fought sporadic firefights with troops.

Shell has said it does not expect a significant increase in output from the western delta this year, and many analysts expect violence to intensify further in the run-up to general elections in April.

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