Shell assessing $4 bln Nigeria oil projects

Royal Dutch Shell Plc is assessing projects that could be worth around $4 billion to boost oil production in Nigeria and cut flaring of associated natural gas, Chief Executive Peter Voser said in comments published on the company’s website.

The projects should be completed by 2015, he said.

Oil companies such as Shell have been criticized for flaring gas instead of trapping it to sell as liquefied natural gas (LNG) or to supply to Nigeria, which suffers huge power shortages despite being Africa’s top energy producer.

Voser did not give details of the projects but said their completion would be subject to approval by Shell’s partners and security in the volatile Niger Delta, where Shell operates.

“Shell is assessing new projects for onshore Nigeria, which will add new production and reduce flaring. These projects could cost some $4 billion,” he said during a speech at a London event on sustainable energy the firm put up on its website.

“We expect these to be completed in the 2014 to 2015 timeframe.”

Investment by oil companies in Nigeria has been held back by a lack of clarity on regulations and oil theft, leaving some predicting that production will start falling soon.

The Petroleum Industry Bill (PIB) to overhaul everything from fiscal terms on projects to the state oil company has been blocked by political wrangling for five years.

Flaring is a major complaint of inhabitants of the oil-rich Delta, whose labyrinth of creeks and swamps are often lit up at night by the bright orange glow of gas flares.

“SPDC (Shell’s joint venture in Nigeria) flared some 20 percent less gas in 2011 than in 2010, while increasing its oil and gas production by 7 percent in 2011,” Voser said.

Source: Reuters


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