Extracts from the Wall Street Journal.
“Nigeria is something of a trouble spot for the oil industry. Though Africa’s largest oil producer, blessed with ample hydrocarbon resources and a large infrastructure network, security problems in the country’s oil-rich Niger Delta plague companies operating in the region, causing frequent supply disruptions.
“The earnings reports of Europe’s oil majors this quarter were littered with references to the difficult operating environment in the country and the impact oil theft and sabotage has had on companies’ production.
However, a quick run-down of the figures suggest things aren’t actually that bad:
- Italy’s Eni lost just 30,000 barrels a day of oil equivalent in the first half of the year as a result of oil theft and flooding in Nigeria, that’s equivalent to 2% of the company’s overall production in the period.
- France’s Total said increased incidences of theft and sabotage in Nigeria had offset an increase in production as a result of better security in Yemen in the second quarter of the year, but at the same time, the restart of the country’s Ibewa field helped boost output by 2%.
- Even Royal Dutch Shell, which said it lost 100,000 barrels of oil equivalent a day in the second quarter due to the deteriorating security situation in Nigeria, only took a $250 million hit to its earnings as a result of the disruptions.
Meanwhile, companies are sinking more money into the country:
- In June, Total got final approval to develop Egina, an oil field in deep water offshore Nigeria that the company predicts will produce 200,000 barrels a day.
- Shell is planning on spending $1.5 billion to build a new and more secure loopline for a major pipeline in the Niger Delta and a further $2.4 billion on five new gas projects in the country.
- Nigeria’s Oil Troubles: The Bottom Line (blogs.wsj.com)
- Shell Flees to Nigerian Offshore Fields Amid Onshore Woes – Bloomberg (bloomberg.com)
- Shell Looks to Change Its Strategy in Nigeria (fool.com)
- Shell invests N45bn in Niger Delta in 2012 (vanguardngr.com)
- Nigeria’s oil-rich delta boils over longstanding grievances (worldbulletin.net)