20 February 2013

Nigeria: Shell - Operating Cost in Nigeria High

Operating in the Nigerian oil and gas business environment has been described as challenging with costs at the high end of the global scale.

Managing Director of Shell Petroleum Development Company (SPDC) Nigeria, Mutiu Sunmonu, stated this yesterday at the ongoing 2013 edition of the Nigeria Oil and Gas (NOG) conference and exhibition in Abuja. According to Sunmonu, said the challenge of operating in Nigeria begins with the contracting and licensing process "can be long and tortuous process."

On the onshore, he said there are a multitude of security related issues that have to be dealth with on a daily basis.

For instance he cited the challenge of oil theft and sabotage which leads to lost production and even more cost and resource pressure, while estimating that Nigeria losses $6 billion annually to crude theft.

Acknowledging government efforts at addressing the challenges, Sunmonu said, "In the recent past militancy has simply been replaced by industrial scale oil theft and sabotage. We, and others, have had to shut-in significant production; spend huge amounts on replacing and repairing hardware and deploying massive resources to clean up spills."

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