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Shell Plans $9bn Five-year Investment

TheDayOnline (Nigeria): Shell Plans $9bn Five-year Investment

“Shell said it was currently losing on the average, 50,000 barrels per day (bpd) to crude theft.”

Moves headquarters to Port Harcourt January

By Mike Oduniyi

Posted 30 August 04

Shell Petroleum Development Company (SPDC) is planning to invest another $9 billion in the Nigerian oil and gas sector, over the next five years.

The investment covers the company’s joint venture projects with the Nigerian National Petroleum Corporation (NN-PC), oil exploration and production in the deep offshore and the expansion of the Nigerian Liquefied Natural Gas (LNG) plant.

Already, Shell has awarded a $43 million contract for the exploitation of non-associated gas from its Oil Mining Leases (OMLs) 35 and 46. The gas will be supplied to the Bonny LNG plant from 2008.

Speaking in Lagos at a dinner in honour of staff of the company appointed into senior positions at the weekend, the outgoing Managing Director of SPDC, Mr. Chris Finlayson, said the investment plan will ensure that Shell maintains its position as the largest foreign investor in Nigeria.

Finlayson said that the investment represents Shell’s long-term commitment to Nigeria.

“Coming at a time when there was some speculation about Shell’s future in Nigeria, this development is a resounding demonstration of Shell’s long-term commitment, quite apart from the further $9 billion that Shell intends to invest through SPDC, SNEPCO and NLNG over the next five years,” he said.

Projects that will benefit from the investment include, the NLNG Train Six, Soku gas plant expansion, Offshore Gas Gathering System (OGGS) and the Bonga Southwest deepwater field with capacity of 145,000 barrels per day (bpd).

The commitment, according to him, was also demonstrated by the recent designation of Lagos as the Headquarters of Shell Exploration and Production Africa, where 30 percent of its leadership will be in Nigeria.

Finlayson will assume the position of Chief Executive Officer of Shell Exploration and Production (Shell EP) in Africa with effect from October 1, 2004. He will be succeeded as head of the Nigerian operations by Mr. Basil Omiyi, a Nigerian.

Finlayson announced that SPDC headquarters will be fully relocated to Port Harcourt next January, as part of a major restructuring in the company.

He said despite the location of Shell’s African regional headquarters in Lagos, the incoming managing director of SPDC, “will have exactly the same freedom of action and responsibilities as I have had as MD.”

SPDC had appointed Mr. Mark Corner, as deputy managing director in addition to holding the portfolio of the Production Director. According to Finlayson, oil and gas production remains the heart of the company’s business. “The aspirations of the Federal Government and the current favourable oil price environment both represent unique opportunities for the industry to grow,” he said.

Also speaking at the occasion, the SPDC managing director designate, Omiyi, said he would on assumption of duty on September 1, this year, be leading a new team that would deliver on Shell’s commitment as operator of the NNPC/Shell/Total/Agip Joint Venture. The immediate focus of the team, according to Omiyi, will be to reposition the business to be able to deliver real value to stakeholders, achieve a gas flare down by 2008, pay more attention to sustainable community development and work closely with the government to eradicate criminality in the oil producing areas, especially oil theft. Shell said it was currently losing on the average, 50,000 barrels per day (bpd) to crude theft. “We will therefore continue to depend on governments at local, state and federal levels, as well as community leaders to address the situation. “The challenges posed by SPDC’s importance to the national economy and the sensitivities surrounding oil and gas production mean there has never been and would never be a dull moment for us,” he said.

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