Hector Igbikiowubo and Ben Agande With Agency Reports
5 June 2008
Lagos — THE French energy giant, Total, has commenced an assessment of its continued presence in Nigeria's Niger Delta following the spate of violence in the area.
Already, arrangements have been concluded for another company to take over Shell operations in Ogoniland by December this year.
Addressing a French parliamentary committee, Mr Christophe de Margerie, Chief Executive of Total, warned that any pull-out would cause a surge in already record high oil prices.
"We have people who work over there ... who are unfortunately more and more often subjected to major aggressions (or) kidnapped," he said.
"We are asking ourselves the question (about staying)," he said, before adding that a decision to leave would send prices spiraling above their record of $135 a barrel.
"I can tell you clearly that if Total or any other oil company decided to leave Nigeria for security reasons, it is not $130, it is X that you'll have," he said, using X as an unknown, higher value in the future.
Oil companies and their personnel in the Niger Delta are being increasingly targeted by separatist militants who have stepped up a campaign of kidnaping and sabotage.
The loss of production in Nigeria, about one quarter of its normal output, has been one of the factors behind the surge in oil prices over the last two years.
The latest figures from the Organisation of Petroleum Exporting Countries showed that Nigeria, previously the biggest oil producer in Africa, was surpassed by Angola in April.
Angola produced 1.873 million barrels per day on average in April, trumping the 1.818 million bpd produced by Nigeria.
Citing Nigeria's daily output of nearly 2.0 million barrels of oil, the Total boss said a withdrawal by his or any other major company would "confront us with a veritable energy shortage and prices would surge."
President Yar'Adua, who has forecast a solution to the problems of the Delta within three years, plans to hold a summit on the question, including representatives of the major oil companies, in the next two months.
He is also trying to push through a development package for the region worth N79.4 billion (434 million euros, 673 million dollars). Separatist groups complain that while the Niger Delta accounts for 95 percent of Nigeria's revenue, very little of it gets back to local people.
Shell to exit Ogoni
After several years of disagreement between the Ogoni Community and Shell Petroleum Company, President Umaru Yar'Adua said yesterday that by the end of the year, another oil operator would take over Shell interests in Ogoniland.
President Yar'Adua at a meeting with the Nigerian community in South Africa where he is on a state visit, said it was clear that "there is a total loss of confidence between Shell and the Ogoni people".
"Another operator acceptable to the Ogonis will take over. Nobody is gaining from the conflict and stalemate, so this is the best solution," he said.
Agreements, he said, had already been reached for compensation to be paid by Shell for the environmental degradation arising from the spillage of crude oil resulting from their operations.
The President assured Nigerians living abroad that his government had taken up the issues of shabby treatment of Nigerians by other nations at the highest level, noting that government would treat the issue firmly.
Challenging Nigerians living abroad to " project a good image of the country in all their activities," President Yar'Adua assured Nigerians in Cape Town that his administration would protect all Nigerians in all circumstances, adding that the Ministry of Transport was looking at the incidence of maltreatment of Nigerians by the British Airways, and that "sanctions would be applied" if found necessary.
He also said it was erroneous for the rising price of crude oil to be blamed on the crises in Iraq, Venezuela and Nigeria, attributing the situation to increasing energy demands by strong emerging economies, as well as the activities of speculators.
President Yar'Adua briefed them on government's determination to focus on the development of "economic growth enablers," which will trigger the Nigerian economy towards irreversible development.
"If we pay urgent attention to power supply, iron and steel, petroleum and cement, all other sectors will pick up," he said.
President Yar'Adua had earlier co-chaired a Nigeria-South Africa Business Forum, with South Africa's President Thabo Mbeki.
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