The Times: Shell adds to woes with Nigeria delay
By Our Business Staff
April 02, 2004
Shell today added to its investors' already substantial anxieties, announcing that the start-up of its Nigerian operation at Bonga would be pushed back to 2005 from late 2004, the start date given by the beleaguered oil giant in February.
Bonga is Nigeria's biggest offshore oil project and is expected to yield 225,000 barrels of crude a day once operational.
Shell has been beset by problems since January, when it cut its reserves by 20 per cent, or 3.9 billion barrels of oil and gas. The move led to the ousting of Sir Phillip Watts as head of the Anglo-Dutch company and the launch of an investigation by the SEC, the American stock market regulator.
It was also reported that senior executives at Shell were aware that the company's internal audit system did not match SEC guidelines as long ago as 2001.
More than one billion of the deleted barrels were sourced from Nigeria, where Shell may have come up against Opec restraints. The existence of massive oil deposits in the Niger Delta is not doubted, but Shell has to comply with Nigeria's Opec quota and the company should not have booked reserves of oil that Nigeria was unable to export.
The delay at Bonga could pose a bigger problem for Nigeria in gaining a bigger share of Opec's output quotas, where capacity tends to be a key yardstick.