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Shell Loses 40,000 Bpd From Nigeria Pipeline Attack


04/09/2008

Royal Dutch Shell plc is losing 40,000 barrels per day of Nigerian oil output after militants blew up parts of a key pipeline this week, its chief executive said on Thursday.

The Movement for the Emancipation of the Niger Delta (MEND) said it carried out the attack, which pushed oil prices up. Shell had said it halted some output from the Nembe Creek trunkline, without giving a figure.

"We had just this Monday the close-in of Nembe Creek, which is an additional 40,000 barrels per day," Shell CEO Jeroen Van der Veer said on a conference call. "It’s too early to say how long that will last."
The Shell chief also said the company was looking at how to keep its Nigerian oilfields safer from attacks by militants, after a rare assault on a field far offshore last month.

Militants in speedboats in June attacked the Bonga field, which lies some 120 km (75 miles) off the coast, forcing Shell to shut output from the 220,000 bpd site.

"We have always, rightly or wrongly, thought that being that far away, an attack was relatively unlikely," Van der Veer said.

"What has happened since, with the government and all sorts of specialists, we will think through how we can better protect our facilities."

The attack by MEND -- which until then had mainly blown up oil pipelines and kidnapped expatriate workers in the shallow creeks of southern Nigeria -- raised concern of a new campaign against deepwater installations.

The instability has been a major headache for Shell, which was long the leading oil producer in Nigeria and has been hardest hit among foreign oil firms by the unrest.

During the second quarter, Shell had 195,000 bpd of production shut down in Nigeria, Van der Veer said.

That was reduced to 178,000 bpd in the first three weeks of July, before the Nembe attack.


 

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