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Bloomberg: Nigeria Hasn’t Yet Revised Shell, Total Oil Contracts (Update1)

By Tara Patel and Fred Pals

Oct. 24 (Bloomberg) — Royal Dutch Shell Plc and Total SA haven’t been contacted about a possible renegotiation of oil contracts in Nigeria, the companies said today.

“We have not officially seen anything from the Nigerian government so it is too soon to make a comment,” Wim van de Wiel, Shell spokesman in The Hague, said in a telephone interview today. Shell is Europe’s largest oil company.

Total spokeswoman Patricia Marie said the French company hasn’t been contacted by Nigeria about possible changes either.

Nigerian Petroleum Minister H. Odein Ajumogobia said on Sept. 24 in New York that the country will re-examine contracts signed years ago with foreign oil companies and may alter them to give the state a greater share of oil revenue. Russia, Venezuela and other producer nations have made similar changes over the past two years.

“A move by countries to renegotiate contracts is a trend these days,” Total’s Marie said in a telephone interview. “We hope if this happens in Nigeria the government will honor its contractual agreements.”

Rilwanu Lukman, a petroleum advisor to the Nigerian presidency, yesterday urged reviews of joint venture oil production agreements and deepwater production sharing contracts with international oil companies. Existing contracts with foreign oil companies have a provision that gives the government the ability to change some terms, he told reporters in Abuja yesterday. Lukman is a former Nigerian oil minister and former OPEC president.

Total, Shell Ventures

Total, Europe’s third-largest oil company, pumped 242,000 barrels of oil equivalent a day last year in Nigeria, or about 10 percent of its overall output.

Shell is the largest foreign producer in Nigerian oil and has suffered the most from militant violence in the Niger Delta that’s forced it to close some joint venture fields. In the second quarter, Shell’s share of shut-in production was 195,000 barrels a day.

“When the time for renegotiation comes, we will renegotiate,” Nigeria’s Lukman said yesterday, declining to specify when that may be. “We’ll take into account the current conditions.”

Nigeria’s government plans to change its oil and gas policy to use it as “intelligent and active means of driving our economy forward” rather than a “national cash cow,” he said.

Shell, Total and Eni SpA are shareholders in the Shell Petroleum Development Co. joint venture with state-run Nigerian National Petroleum Corp.

An Eni spokesman in Milan declined to comment.

To contact the reporters on this story: Fred Pals in Amsterdam at [email protected] ; Tara Patel in Paris [email protected]

Last Updated: October 24, 2007 08:03 EDT

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