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Nigeria: Shell to Continue Operations, Denies Plan to Evacuate Workers

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By Ejiofor Alike: 10 May 2016

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Shell Companies in Nigeria have restated their long-term commitment to the Niger Delta, saying they would continue operations in the oil-rich region despite the spate of militant attacks in recent days.

Shell has also denied evacuating its personnel from the region, saying that it was monitoring the security situation in the region very closely.

A militant group, which has identified itself as Niger Delta Avengers (NDA), had attacked Chevron’s facilities in the Escravos area of Delta State last Wednesday and Thursday.

The twin attacks affected the Escravos-Warri pipeline, which feeds the Warri and Kaduna refineries, cutting off crude feedstock to the two facilities.

While Chevron has reportedly evacuated staff from the affected facilities, Shell said it would continue to monitor the security situation in the region.

Responding to enquiries by THISDAY, a Shell Nigeria spokesman, Mr. Precious Okolobo said last night that the company was taking all possible steps to safeguard its staff and contractors.

“We continue to monitor the security situation in our operating areas and are taking all possible steps to ensure the safety of staff and contractors. We do not wish to go into details. Our operations are continuing,” Okolobo explained.

The spokesman of the new militant group, Mr. Mudoch Agbinibo, had placed the blame for the attacks on the doorstep of ex-militant leader and senior Ijaw traditional chief, Chief Government Ekpemupolo, better known as Tompolo.

The group, which claimed responsibility for the attacks, warned politicians, traditional rulers and other influential individuals in the oil-rich region to stop their meddlesome activities and selfish politicking aimed at putting them in the good books of the federal government.

The NDA spokesman alleged that last Thursday’s attack was pursuant to the three-day ultimatum given to Tompolo “to apologise” to the group for allegedly insulting it.

Agbinibo said that the attack was merely in fulfillment of NDA’s threat to launch an attack on an oil installation within Tompolo’s enclave in Ijaw Gbaramatu Kingdom.

While “Team 6” of the group was said to have carried out Wednesday’s attack successfully, Thursday’s operation was carried out by its “Team 4”, the group had said, stressing its determination to deal a deadly blow on oil and gas production in Nigeria.

“This is a clear warning to all the Niger Delta politicians, traditional rulers, community leaders, and the likes of Tompolo to mind their businesses and leave the liberation of the Niger Delta people to the Avengers; and to those who believe taking sides with (the) federal government to fight Niger Deltans is the best option,” NDA had warned.

With the resurgence of militancy in the oil-rich Niger Delta region, the United States Energy Information Administration (EIA) is estimating that Nigeria loses 500,000 barrels of crude oil per day to sporadic supply disruptions, which have resulted in unplanned outages.

EIA said in its latest report that although Nigeria is the largest oil producer in Africa, with the largest natural gas reserves on the continent, as well as the world’s fourth-largest exporter of liquefied natural gas (LNG) in 2015, the country’s production is affected by sporadic supply disruptions.

“Nigeria is the largest oil producer in Africa and is among the world’s top five largest exporters of liquefied natural gas (LNG). Supply disruptions, typically caused by pipeline sabotage from thieves siphoning crude oil and condensate, are common in Nigeria’s oil and natural gas industries.

“Pipeline sabotage and oil supply disruptions have increased in 2016, leading to a decline in Nigeria’s crude oil production. Because Nigeria heavily depends on oil revenue, its economy is noticeably affected by changes to its oil production and/or to global crude oil prices,” said EIA.

Citing a recent report by the International Monetary Fund (IMF), EIA said the report revealed that Nigeria earned $52 billion from oil and gas exports in 2015, $35 billion less than in 2014, which was mostly attributed to the fall in oil prices that began in the middle of 2014.

EIA noted that while Nigeria’s oil production was hampered by instability and supply disruptions, the country’s natural gas sector is restricted by the lack of infrastructure to commercialise natural gas that is currently flared.

Meanwhile, oil marketers in the country have continued to groan over the scarcity of foreign exchange, and the failure of the international oil companies (IOCs) to make available the $200 million to enable them meet their fuel import allocations for this quarter.

Major and independent marketers told THISDAY that the scarcity of dollars has affected their capacity to raise foreign exchange required to import fuel.

One of the marketers said the scarcity was worsened by the dwindling supply from the CBN and the failure by the IOCs to provide the $200 million, as earlier pledged by Kachikwu.

“What CBN gives the banks is not sufficient. One cargo of petrol costs $15 million. When three or four marketers are requesting for dollars from the CBN through a bank, they will require up to $60 million. But CBN gives as little as $2 million to some banks as forex for fuel importation. So it is not enough.

“The IOCs have also not been able to provide the $200 million they promised through the NNPC,” he explained.

Another marketer added that even the forex provided by NNPC through a special arrangement with the Petroleum Products Pricing Regulatory Agency (PPPRA) was no longer forthcoming.

According to him, NNPC used to give the marketers promissory notes as guarantee that they would pay for the forex, but this was no longer available.

The monthly financial and operations report of NNPC for the month of February had revealed that the corporation would source $200 million from the IOCs for the marketers to import petrol this quarter.

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