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AFX News Limited / Forbes: Shell says security issues delay plans to end gas flaring in Nigeria

LONDON (Thomson Financial) – Royal Dutch Shell PLC blamed escalating security problems in the Niger Delta as one of the major factors hampering its effort to end gas flaring in Nigeria.

Malcolm Brinded, head of Shell’s exploration and production business, told Thomson Financial News on the sidelines of an oil and gas conference in London that ‘security and funding remain a challenge’ to the group’s plan to stop flaring.

Shell’s facilities in the oil-rich Niger Delta have been the target of the series of violent attacks by separatist militants who have been kidnapping employees of foreign oil companies and blowing up pipelines. This has forced the Anglo-Dutch oil giant to shut some of its key facilities in the area.

Outages in Nigeria were partly behind the decline in Shell’s 2006 volumes to 3.473 mln barrels of oil equivalent per day. Shell is the largest oil producer in Nigeria, contributing nearly half of the west African country’s daily output of over 2.5 mln barrels.

A high court in Nigeria ruled in November 2005 to put an end to oil companies’ damaging practice of burning off waste gas.

Shell appealed on the court action and it, along with the other oil and gas producers, were given until April this year to stop gas flaring.

Shell has already invested about 2 bln usd to reduce flaring to 2005 and was planning to spend another 1.8 bln usd to finally end the practice in 2009, a year later than it originally planned.

Nigeria has been the world’s biggest gas flarer, and the practice has contributed more greenhouse gas emissions than all other sources in sub-Saharan Africa combined, according to Friends of the Earth, quoting a 2002 World Bank report.

The toxic substances which have been emitted in the flares for over 40 years has exposed Niger Delta communities to health risks and property damage, the FoE said.

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