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Nigeria: Oil Revenue Slides Further As Shell Shuts More Fields

Daily Champion (Lagos)

Sopuruchi Onwuka

5 March 2009

Lagos — Nigeria’s fiscal outlook for the year has continued to face negative signals from the petroleum industry where more production losses were recorded as a result of a pipeline blast at the weekend.

The losses which will translate to revenue losses to the federation account followed sustained militant onslaught on production and conduit facilities in the Niger Delta.

Shell Petroleum Development Company (SPDC) Nigeria Limited, which operates the biggest exploration and production joint venture with government, announced it has shut unspecified volume of production following facility sabotage by people suspected to be local militants.

A spokesman of SPDC, Mr. Precious Okolobo, confirmed to Daily Champion that production from some of the company’s fields have been shut to mitigate impact on the environment.

He did not however state the accurate volume of production loss in barrels, saying the company was conducting preliminary investigations into the pipeline blow up.

He said a full report on the incident would soon be ready.

Earlier, the parent Royal Ducth Shell Plc had announced that the company had shut a number of oil installations following explosions on a pipeline.

Shell spokeswoman Kirsten Smart said on Tuesday that “SPDC can confirm that there have been explosions on the trans-Escravos pipeline.”

She added that “a number of facilities have been shut in to minimize potential damage to the environment.”

“The incident was first reported by surveillance personnel on Saturday,” she added.

Militancy in the Niger Delta has cut Shell’s production by over 600,000 barrels per day and Nigeria’s total oil and condensate production by over one million barrels per day since 2006.

African regional chairman of Shell, Ms Ann Pickard, declared that militancy in the Niger Delta has caused the country to lose over $6.5 billion in terms of missed opportunity to take the deferred oil to market at a time of peak prices.

Low oil prices and declining output have combine to put the nation’s budget for 2009 in a precarious position as militants frighten oil companies out of production sites with heavy arms and ammunition.

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