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Shell looks at $4B in possible projects in Nigeria

Associated Press: Published April 18, 2012

LAGOS, Nigeria –  Royal Dutch Shell PLC is considering $4 billion worth of onshore projects in Nigeria to help capture natural gas currently burning at oil wells that contribute to global warming and can sicken those living nearby, the company’s CEO said Wednesday.

CEO Peter Voser also said Shell’s oil production rose to about 800,000 barrels a day in 2011, up after years of militant activity in the country’s Niger Delta cut into output.

Voser made the comments Wednesday in London at a conference for Shell, long the dominant foreign oil company operating in crude-rich Nigeria. He said the investments in natural gas would support efforts by the company to cut down on the gas fires, known as flaring.

“We expect these to be completed in the 2014 to 2015 timeframe, subject to approval by partners and the security situation,” Voser said in his speech, which Shell released on its website.

Environmentalists describe flaring as one of the largest sources of greenhouse gases which cause global warming. Those living in the Niger Delta say the burning contributes to acid rain and causes respiratory illnesses. Flaring leaves their fishing villages bathed in light at all hours and kills the fish living among the creeks and swamps of the roughly 51,800-square kilometer (20,000-square mile) delta.

Nigeria flared off 15.2 billion cubic meters of natural gas in 2010 alone, second only to Russia, according to World Bank estimates.

Oil production at oil fields run by Shell’s local subsidiary, in partnership with the state-run Nigerian National Petroleum Corp., has risen in recent years as well. However, Voser said the security situation remains uncertain in Nigeria, where militants still attack pipelines and thieves steal crude despite a 2009 amnesty deal. Voser said gunmen killed two contractors working with Shell last year.

Crude oil thefts also continue to rise, with estimates that as much as 150,000 barrels of day are stolen, Voser said. That crude, either sold on the black market or refined into crude diesel or kerosene, is worth $7 billion at current market rates, he said.

Shell, as well as other foreign firms, increasingly blame oil thefts for much of the oil spills in the delta. However, Shell’s offshore Bonga facility saw nearly 40,000 barrels of oil spilled in an apparent industrial accident in December.

Nigeria, which produces about 2.4 million of barrels of oil a day, is a top crude oil supplier to the U.S.

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