Nigeria’s Oil Morass

Shell Takes $716 Million Charge After Attacks

After insurgents attacked a link to a key oil export terminal on the Forcados River in Nigeria’s Delta region in February 2006, it took a year and a half for Royal Dutch Shell to make repairs and get part of it running again. It took just two months for insurgents to shut it down again.

The result: Just when oil-consuming countries want more high-quality petroleum to cool off high oil prices, a group of insurgents in the West African nation forced oil companies to stop pumping an average of 475,000 barrels a day last year, and at times as much as 600,000 barrels a day.


Yesterday Royal Dutch Shell, the biggest foreign company in the strife-torn Niger River Delta, said it would take a $716 million charge against earnings largely because of the security situation there. Industry sources say that in addition to the production shutdown, about 435 miles of pipeline and thousands of barrels a day of crude oil and condensates have been stolen. Much of the pipeline has been used for pillars in house construction.

Washington Post