Shell says Nigerian strife has slashed oil production

Royal Dutch Shell said militant attacks have shut 220,000 barrels a day of crude output in Nigeria.

Daily output of 220,000 barrels is stopped as of today, including 42,000 barrels after pipeline attack on July 28, Chief Executive Officer Jeroen van der Veer said in a telephone conference. That’s up from the 195,000 barrels a day that was halted in the first and second quarters, he said.
Attacks on pipelines and production facilities in the oil rich-Niger Delta have disrupted production since 2006. Groups such as the Movement for the Emancipation of the Niger Delta, or MEND, are targeting facilities run by Shell, the biggest foreign producer in the country. Nigeria typically produces the light, sweet crude type favored by refiners for its gasoline yield.

Shell’s production was cut by 42,000 barrels a day this week after a pipeline attack. Shell declared so-called force majeure on Bonny Light crude deliveries in July, August and September following the sabotage, for which MEND claimed responsibility. Force majeure is a legal clause that allows producers to miss contracted deliveries because of circumstances beyond their control.

The company was forced to shut production at the deep-water Bonga oil field on June 19, cutting about 200,000 barrels a day of output, after the production vessel was attacked. Militants had previously focused on onshore and shallow fields in the creeks of the Niger delta. Bonga production resumed on June 24.

Rebels have also targeted Chevron, Exxon Mobil and Eni. Chevron’s onshore production was cut on June 19 after militants sabotaged a pipeline and 47,000 barrels a day of Eni’s production was cut on July 17 after another pipeline attack. Shell’s EA field has been closed since Feb. 2006.

Houston Chronicle