Royal Dutch Shell is losing 40,000 barrels of Nigerian oil every day after militants destroyed a pipeline this week, the company’s chief executive said yesterday.

Speaking as the group unveiled a 5 per cent rise in second-quarter profits to $7.9 billion (£3.9 billion), Jeroen van der Veer said the pipeline attack this week had hit output from the Nembe creek trunkline. “It’s too early to say how long that will last,” he said.

The Movement for the Emancipation of the Niger Delta (Mend) claimed responsibility for the attack, the latest in a string of incidents that has toppled Nigeria from its position as Africa’s largest oil producer. Angola is now producing more.

Mr van der Veer said that the Anglo-Dutch oil giant was examining new security precautions for its offshore facilities after a speedboat attack in June on an oil platform 75 miles off the Nigerian coast in its Bonga offshore field. He said that the attack temporarily forced Shell to cut production by 200,000 barrels per day.

“We have always, rightly or wrongly, thought that being that far away, an attack was relatively unlikely. After what has happened, we will think through how we can better protect our facilities with the Government and specialists,” he said.

The drop in its Nigerian production resulted in a fall in overall second quarter production by Shell to 3.126 million barrels per day from 3.178 million.

Shell said that “clean” second-quarter profits, a figure that includes an accounting adjustment to reflect commodity price changes during the period, rose 24 per cent to $8.6 billion. The company was boosted by surging oil prices, which reached a record of $147 a barrel a few days after the reporting period ended. The bulk of profits were derived from Shell’s exploration and production division, which posted a $5.9 billion profit up from $3.1 billion last year, aided by soaring oil prices that ended the quarter close to the record price.

Mr van der Veer said that the results were competitive.

The group said that it had suffered a steep fall in earnings from its chemicals unit and from refining and marketing. Earnings from its chemicals division fell from a $494 million gain in the second quarter last year to a $142 million loss this year.

Mr van der Veer said that it was hit by the rising price of gas, a key raw material, as well as one-off charges associated with the closure of a plant in Puerto Rico. He said: “Shell is making substantial, targeted investments to grow the company for shareholders and help to ensure that energy markets remain well supplied. Spending is increasing on new acreage and selective acquisitions as we refresh the portfolio with new options for future growth.”

This week, BP announced record second-quarter profits of $9.46 billion. The bulk of gains were derived from BP’s exploration and production division, which benefited from higher oil and gas prices during the period. Oil averaged more than $120 a barrel during the quarter, nearly twice the level of 2007.

http://business.timesonline.co.uk/tol/business/industry_sectors/natural_resources/article4438960.ece