AFX Europe (Focus): Shell Nigerian oil deliveries to be curtailed: “Royal Dutch/Shell Group said local protests will disrupt about 10 percent of the company's Nigerian crude-oil deliveries through February…” (ShellNews.net) 23 Dec 04
Dec 23, 2004
SAN FRANCISCO (AFX) - Royal Dutch/Shell Group said local protests will disrupt about 10 percent of the company's Nigerian crude-oil deliveries through February, according to a published report Thursday.
Shell said it won't be able to meet obligations for delivery of about 114,000 barrels a day from a loading terminal in the Niger Delta, the online edition of the Wall Street Journal reported. A company spokesperson told the Journal the force majeure action, taken when an uncontrollable event forces the breaking of a contract, means buyers may face delays of about eight days for contracted oil deliveries through January, and Shell expects "some impact" on February scheduling. Local activists occupied Shell-operated facilities in two oil fields in Nigeria earlier this month, according to the Journal, forcing the company to curtail production. The villagers, who were protesting what they said was a lack of local benefits from oil development, left those facilities, but negotiations with Nigerian government officials continue and crude-oil production hasn't resumed, the Journal reported. Shell and its government-controlled joint-venture partner typically produce about 1 million barrels of oil a day in Nigeria, according to the Journal, and Shell's equity stake amounts to about a third of that output. Nigeria's total oil production stands at just over 2 million barrels a day, according to the Energy Information Association. The region has been rife with turmoil for years, and the disruptions have had a notable effect on oil prices. This is the third time that Shell has declared force majeure in Nigeria since May 2003, a spokesperson told the Journal. Amid tight oil markets and soaring prices this year, however, Nigeria has been pumping flat-out, according to the Journal, making it unlikely that Shell will be able to make up the shortfall in other regions. Crude for February delivery traded as low as $43.65 a barrel on the New York Mercantile Exchange before closing at $44.24, down $1.52. Royal Dutch/Shell is the parent of two separately traded oil companies: Royal Dutch Petroleum Co. and U.K.-based of Shell Trading and Transport Co. Pub. LTD . U.S.-traded shares of Royal Dutch added 7 cents to end at $56.28. Shell's U.S.-traded shares closed at $50.56, up 12 cents or 0.24 percent. This story was supplied by CBSMarketWatch. For further information see www.cbsmarketwatch.com.