More articles.Attacks cut Shell Nigeria onshore oil output by...

More articles.
Attacks cut Shell Nigeria onshore oil output by half
Tue Jun 30, 2009 12:49pm

* Latest attacks slash Shell's onshore output

* SPDC production half levels of earlier this year

(Adds details, background)

By Nick Tattersall

LAGOS, June 30 (Reuters) - Attacks by Nigerian militants in recent days have slashed oil output from Royal Dutch Shell's (RDSa.L) onshore facilities to around 140,000 barrels per day, around half of what they were producing earlier this year.

The Movement for the Emancipation of the Niger Delta (MEND) militant group has carried out a wave of attacks since last month, mostly in the western Niger Delta, hitting facilities belonging to Shell, Chevron (CVX.N) and Agip (ENI.MI).

"In the past 10 days we have had five attacks that have reduced our oil production to around 140,000 barrels per day," Shell's Africa communications director Olav Ljosne told Reuters, referring to output from the company's SPDC joint venture.

SPDC is the largest private oil and gas company in Nigeria and operates a joint venture in which the state-run Nigerian National Petroleum Corporation (NNPC) holds 55 percent, Shell 30 percent, Total (TOTF.PA) 10 percent and Agip (ENI.MI) 5 percent.

The joint venture operations, all in the delta's swamplands, have the capacity to produce an average of 1 million barrels of oil equivalent per day (boepd). In 2008, production averaged over 850,000 boepd, according to the company's website.

Industry sources say output after the latest attacks is less than half the amount SPDC was producing earlier this year.

SPDC's operations in the world's eighth biggest oil exporter include two major oil export terminals at Bonny and Forcados as well as 90 oilfields, 1,000 producing wells, 73 flow stations and eight gas plants.

Forcados production has been stopped after a pipeline leading to the terminal was destroyed by militants but exports are continuing from three cargoes -- between 2-3 million barrels -- of stocks, NNPC spokesman Levi Ajuonoma said on Monday.

Shell said on Monday it had shut in some production as a precaution while it investigated reports of attacks on two well clusters in the Estuary Field in its western operations, which feed into its Forcados export terminal. [ID:nLT671472]

It had already extended a force majeure on Forcados shipments for the rest of June and July, freeing it from contractual obligations. The measure was first imposed in March after an attack on its trans-Escravos pipeline.

The Movement for the Emancipation of the Niger Delta (MEND), the region's main militant group, has also claimed attacks this month against Shell's Krakama, Adamakiri and Kula pipelines in Rivers state in the eastern Niger Delta.

The Anglo-Dutch firm also said on June 18 some oil production had been halted following an attack on its Trans-Ramos pipeline in Bayelsa state.

Shell also operates in deep water off Nigeria through its 100 percent owned SNEPCO subsidiary, which has the capacity to produce more than 200,000 bpd.

(For full Reuters Africa coverage and to have your say on the top issues, visit: af.reuters.com/ ) (Editing by Randy Fabi/Barbara Lewis)