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The Peninsula (Qatar): Shell ready for tough defence of oil deals in Nigeria: Official

Web posted at: 11/3/2007 7:44:18
Source ::: Reuters

ABUJA • Royal Dutch Shell is preparing for tough talks with Nigeria in a review of multi-billion dollar offshore oil contracts, a top executive told said yesterday.

The government of President Umaru Yar’Adua has put its largest investors on notice that it wants a greater share of the profit from fields in deep water, which will account for a third of supply from Africa’s top producer by the end of next year.

Chima Ibeneche, managing director of Shell’s offshore division in Nigeria, said in an interview that he was not surprised by the announcement because there was an option for a review in 2008 written into some of the contracts.

Oil prices far above what anyone imagined when deals were signed in the early 1990s are a further reason to look again, he added.

“I am willing to talk to them, but I can guarantee you we will have points of disagreement,” Ibeneche said.

“I will always be resistant if government is taking away things from me, because it is my business to get a protection for the risk that has been taken and for the investor to get some rewards.”

Oil producers Russia, Venezuela, Algeria and Britain have all modified terms with investors in the light of soaring prices, which hit a new record of $96.24 a barrel on Thursday.

“The government is trying to see how it can improve the return it has from its assets at a time when the oil price is quite impressive,” Ibeneche said.

Nigerian exploration licences awarded in 1993 or soon after have turned out a string of giant discoveries in deep water, including Shell’s Bonga, ExxonMobil’s Erha, Chevron’s Agbami and Total’s Akpo.

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