Attacks Cripple Shell’s Niger Delta Operations

THE WALL STREET JOURNAL

July 19, 2009

By OBAFEMI OREDEIN | Dow Jones Newswires

IBADAN, Nigeria–Royal Dutch Shell PLC said Saturday it was operating its many facilities in the Niger Delta with a minimum staff following the frequent attacks on its facilities in the region by militants.

“Shell Petroleum Development Company’s joint-venture operations in Nigeria continue to be impacted by the security situation in the Niger Delta,” a Shell spokesperson said. “There have been a number of attacks at SPDC’s joint venture facilities in the last four weeks.”

Last month, the Movement for the Emancipation of the Niger Delta, or MEND, carried out at least seven to eight attacks on Shell facilities in the region. They include two pipelines at Adamakiri and Kula in Nigeria’s southeast Rivers state; the Forcados off-shore platform in western Delta state; the well head of the Afremo offshore oil fields in Delta state; and the crude oil trunkline which supplies the Forcados export terminal in Bayelsa state.

Shell declared a force majeure on its Nigeria Forcados offtake program for the remainder of June and for July as a result of the damage to the TransForcados trunkline at Chanomi Creek at its western operations in the Niger Delta. Force majeure protects Shell from lawsuits for failing to meet its deliveries due to actions beyond the company’s control.

Media reports Friday quoted Markus Droll, vice president of Shell’s Exploration and Production Africa, as saying in Lagos that Shell has suspended its operations in the western Niger Delta because of attacks on its facilities by militants.

“As I speak here, we have zero production in our western operations in the delta,” This Day newspaper cited Mr. Droll as saying at an industry conference in the Nigerian commercial capital. “The situation in the East is not much better–East of the delta–Bonny and Port Harcourt. There we have less than 150,000 barrels a day.”

The spokesperson said the recent attacks have resulted in a substantial impact on the environment, assets, production and, most importantly, “the people who live and work in the area.”

She said “the safety of our staff and contractors is our top priority; we are closely monitoring the situation and taking all necessary measures to ensure their safety. We are operating many of our facilities with a minimum staff,” No specific number of staff was given.

Shell is the largest oil company in Nigeria and previously produced more than half of the country’s 2.3 million barrels a day before attacks by militants began in February 2006.

Activities of the militants, who say they are fighting for a bigger share of the huge oil wealth from the Niger Delta, have slashed Nigeria’s crude oil production by at least 1 million barrels according to government officials.

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