Shell: Nigeria Loses N1.827b In Two Days

Nigeria lost $12,600,000 (about N1.827 billion) on Wednesday, two days after Shell cut 180,000 barrels per day (bpd) from its production.

On top of that, there is a languid price of oil on the international market, which sank below $35 on Wednesday.

The Naira traded at N145 to the Dollar before the end of the day’s transaction.

With a reduction of 180,000 bpd from Nigeria’s total 2.2 million bpd, revenue went down by $6,300,000 on Tuesday, and by $12,600,000 on Wednesday.

Shell shut-in 180,000 bpd after an attack on its Nembe flow station in Bayelsa State by suspected loyalists of Kitikata, a militant leader linked with the recent killing of soldiers in the Niger Delta.

The Nembe invasion occurred four days after an official of the Nigerian National Petroleum Corporation (NNPC) disclosed another 90,000 bpd drop in Shell’s Bonny Light crude terminal because of security concerns.

That was after heavily armed militants stormed the loading platform in Bonny, Rivers State and shot at several vessels.

Although Shell Spokesperson, Precious Okolobo, denied any attack on the Nembe facility in Port Harcourt, Shell Chief Executive, Jeroen van der Veer, confirmed at a conference in London that heightened insecurity led to the loss in production.

Shell in 2006 produced about one million bpd prior to the attacks on its facilities. The attacks swiftly reduced its output to about 400,000 bpd.

Shell last Thursday warned that unrest in the Niger Delta, the heart of the oil and gas sector, may prevent it from meeting export obligations from Bonny terminal for the rest of this month and part of March.

"It’s currently at 90,000 barrels per day. We hope to get it back to at least 200,000 in the coming days," a senior NNPC official told Reuters.

Production of Bonny Light, a light crude oil popular with the United States and European refiners, has fallen sharply in the last few years since the Movement for the Emancipation of the Niger Delta (MEND) began a violent campaign against the oil industry.

The NNPC official recalled that Bonny terminal produced more than 500,000 bpd before the attacks started in early 2006. A fifth of the country’s output has been shut down since then.

Nigeria, the eighth world largest oil exporter, earns over 90 per cent of its foreign income from the commodity.

It has benchmarked its oil price at $45 pd in the 2009 budget, but the current price which was below $36 per barrel on Tuesday, is about $9 below the target.

A militant group led by Ateke Tom has accused Shell and other oil operators, including Agip and the Nigeria Liquefied National Gas (NLNG), of helping troops to attack its camps in Rivers State.

The MEND, which threatened sweeping attacks on oil companies, has issued a three-day ultimatum to Agip and its sister company, Saipem, to vacate their bases in the region or face sniper fire.

However, Alphine Ogho, the Media Assistant to the Bayelsa State Chairman of the Niger Delta Peace and Conflict Resolution Committee, maintained that the incident at the Nembe flow station was not an attack.