‘Shell May Halt Investment In Nigeria’

Oil giant Shell says it has lost confidence in its Nigerian operations and no longer depends on the country for growth in oil and gas output.

The company’s Chief Executive, Peter Voser, who stated this on the company’s website, noted though that “Shell Staff in Nigeria are doing a great job in this very difficult environment”.

The new stance fuels report of a halt to the company’s investments in Nigeria.

Voser stated that Nigeria “is still a heartland for Shell, but we no longer depend on it for our growth aspirations.

“This gives us more flexibility in deciding when and how to develop oil and gas resources in Nigeria”.

Shell, the dominant force in Nigeria’s oil industry since 1958, may dramatically reduce its presence in the country.

It is seeking buyers for 10 of its onshore oil assets worth between $4 billion and $5 billion in total, people familiar with the matter told Wall Street Journal recently.

China National Petroleum Corporation has been reported as a possible buyer.

Violence, kidnapping and sabotage attacks on infrastructure in the Niger Delta have hampered Shell operations for years.

Despite a recent amnesty and continuing truce between government forces and militants, violence continues.

Four expatriate Shell contractors were kidnapped on Tuesday after their bus was ambushed by gunmen.

Two Nigerians were killed in the attack, while a Chevron pipeline was shut down following sabotage over the weekend.

Voser recounted that “during 2009, sabotage and attacks on (Shell) installations again reduced production levels” and delayed a scheme to reduce gas flaring.

In October last year, he said, Shell’s Nigerian oil output was down to 120,00 barrels per day (bpd) from 300,000 bpd before the violence started.

Following the amnesty, however, oil production levels did improve toward the end of the year and its liquefied natural gas business is performing well, Voser said.

Shell’s output growth in the coming years will be driven by more unconventional energy projects, notably large LNG and gas-to-liquids developments approaching completion in Qatar.