allAfrica.com: Nigeria: Niger Delta Crisis – Production Shortfall Imminent, Shell Warns

This Day (Lagos)
8 January 2008
Chika Amanze-Nwachuku
Lagos

Royal Dutch Shell Chief Executive Officer, Jeroen vander Veer has warned that production would fall rapidly if investment in the Nigerian oil fields were discontinued due to the escalating Niger Delta crisis.

He however stated that the company would continue to invest in Nigeria notwithstanding the current tense situation in the oil-rich region provided its employees can work there safely.

“Nigeria is very rich in oil and gas, onshore and offshore, If you look at the long term, i.e. overdecades, these reserves will indeed be produced. We can and want to participate in this, but only if our people can work safely there”, he said.

In an interview published in Shell’s Dutch in-house magazine, the Shell boss who also spoke on the current rising crude oil prices, saying the developments are slowing down new projects because governments are taking longer to negotiate their slice of revenues.

“It is evident that active government interest is delaying projects. Government negotiations for their share of the revenues are lengthier than in the past.

“Van der Veer said even as he refuted the idea that higher oil prices would actually accelerate decision-making, saying “in reality the opposite is true”.

The Shell Chief who also cautioned that this would ultimately impact on the speed at which the company’s new projects can be taken into production did not however specify which Shell projects might be affected.

On the company’s sale of its controlling stake in the giant Russian Sakhalin-2 project to Gazprom, Russian gas giant last year, Van der Veer said there were no hard feelings. “If this is something that bothers you, you should not participate in international business.

What we have learned from this is that you can only work with large Russian partners in Russia.” “It is becoming increasingly important to distinguish yourself from the rest by offering advanced technology, it is also becoming more important to take our own lead in projects,” Van der Veer said, pointing to Shell’s Pearl gas-to-liquids project in Qatar which does not involve other oil companies.

But Shell will need to work with Russian partners if plans for a major liquid natural gas project in the Jamal peninsula in the far north of Siberia come tofruition. The Shell boss was recently in Moscow with a Dutch industrial consortium and submitted plans to President Putin for an LNG project at the large gas field. “It really is very early days yet, but it’s also extraordinary that a broad consortium of specialist companies put a joint proposal on the table,” of which Shell would bring its LNG technology to the project. “I also observed serious interest from Russian participants at the meeting”, he added.

http://allafrica.com/stories/200801080157.html

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