THE WALL STREET JOURNAL: Shell , Chevron to Cut Deliveries Of Oil Amid Protests in Nigeria: “Royal Dutch/Shell Group said local protests will disrupt about 10% of the company's Nigerian crude-oil deliveries through February. The move is the latest setback for Shell in strife-torn Nigeria, one of its main sources of oil, and comes amid continuing worry about global supplies.” (ShellNews.net) 23 Dec 04
By CHIP CUMMINS
Staff Reporter of THE WALL STREET JOURNAL
December 23, 2004; Page A2
LONDON -- Royal Dutch/Shell Group said local protests will disrupt about 10% of the company's Nigerian crude-oil deliveries through February. The move is the latest setback for Shell in strife-torn Nigeria, one of its main sources of oil, and comes amid continuing worry about global supplies.
Shell said that it won't be able to meet obligations for the delivery of about 114,000 barrels a day from a loading terminal in the oil-rich Niger Delta.
A spokesman said the so-called 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 as well.
Meanwhile, ChevronTexaco Corp., San Ramon, Calif., told Dow Jones Newswires that it wouldn't be able to deliver 20,000 barrels a day of crude oil that passes through the Shell facility in Nigeria.
The moves are the latest disruptions to global oil supplies stretched thin this year by soaring world-wide demand and the threat of stoppages in other big producing regions, helping to drive up prices.
Recently, though, the U.S. -- the world's biggest oil consumer -- has enjoyed a period of rising oil inventories, comforting buyers and easing prices significantly. Government data released yesterday showed another increase in stored oil, sending U.S. benchmark crude-oil futures prices at the New York Mercantile Exchange down $1.52 a barrel to settle at $44.24. (See related article.)
Local activists in Nigeria occupied Shell-operated facilities in two oil fields earlier this month, forcing the company to curtail production. The villagers, who were protesting what they said was a lack of local benefits from oil development around their community, left those facilities, but negotiations with Nigerian government officials continue. Production hasn't resumed.
Shell and its government-controlled joint-venture partner typically produce about one million barrels of oil a day in Nigeria, which represents a little more than 1% of total world supplies. Shell's equity stake amounts to about a third of that output. Nigeria's total oil production stands at just over two million barrels a day.
Contract disruptions have been a regular occurrence in the Niger Delta in recent years amid protests by community groups and environmental activists and strikes by workers targeting oil production in the region. Nigerian disruptions -- or the threat of disruptions -- have stoked global oil prices several times this year.
Write to Chip Cummins at email@example.com