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Nigeria: Shell Restores Damaged Oil Facilities, Resumes Production
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Leadership (Abuja)
14 May 2008
Posted to the web 14 May 2008
Abuja
Royal Dutch Shell has concluded repairs on two of the four Bonny Light oil facilities damaged by militant attacks, LEADERSHIP learnt yesterday.
Shell Nigeria's largest oil producer, had shut down four of its Bonny Light oil facilities following attacks by the regions major militant group, Movement for the Emancipation of the Niger Delta (MEND),this amounted to shutting down about 164,000 bpd of Bonny Light crude production.
Shell, sources said the two repaired oil facilities which supply the Bonny Light export terminal have resumed production. He said efforts are in top gear to commence repairs on the remaining facilities damaged by militants.
The source said though repairs are being affected and there is a dogged determination by Shell to carry on business, there is still no prerequisite security arrangement in place to enable staff work at optimum levels without fear of attacks by militants.
Meanwhile, despite the repairs, Bonny Light shipments remained under force majeure, which frees the company from its export contracts and protects it against legal actions.
The unending crisis between governments, oil companies, oil communities and militants in the Niger Delta has contributed immensely to the current escalating World oil prices.
Recent estimates from Shell puts the daily revenue loss in production in monetary terms to N409 million (N2.24 million euros, N3.47 million dollars).
Niger Delta militant groups notably the MEND headed by Henry Okah have sabotaged several supply pipelines owned by Shell and other oil operators in the restive region.
MEND emerged in early 2006 as the leading group calling for a greater share of Nigeria 's oil revenue for the producer region. Besides attacking facilities, it has seized local and expatriate oil workers, children of prominent politicians and government officials as hostages.
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Overall, violence in the Niger Delta has reduced Nigeria 's total production by a quarter in the past two years. It is this development that prompted President Umaru Musa Yar'Adua while on a visit to Bayelsa State last week to warn that Nigeria may lose its first position in Africa's oil sector if hostilities in the Niger Delta region are not curtailed.
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