THE WALL STREET JOURNAL: Shell Confirms 70,000 B/D Nigeria Output Lost On Protest: “A spokesman for Royal Dutch/Shell Group (RD, SC) in Nigeria confirmed Monday that 70,000 barrels a day of oil production had been lost on a protest by community members.”: "The shutdowns could worsen the declining trend in Nigeria's crude oil production, an oil industry analyst said." (ShellNews.net) 6 Dec 04

DOW JONES NEWSWIRES

December 6, 2004

LAGOS (Dow Jones)-A spokesman for Royal Dutch/Shell Group (RD, SC) in Nigeria confirmed Monday that 70,000 barrels a day of oil production had been lost on a protest by community members.

The official said output via the Ekulama 1 and 2 flow stations in Rivers State remained shut in since early Sunday due to demonstrations by members of the Kula community.

The protesters made no formal demands from Shell, he added.

The company was studying the incident and a further statement may be made later Monday, the spokesman said.

A ChevronTexaco Corp. (CVX) spokesman said a further 20,000 b/d of output from a facility operated by its local unit had been shut in on the same protest.

Protesters in the Niger Delta, which provides most of Nigeria's oil output, frequently target oil installations to demand compensation from oil companies for environmental and health issues.

The shutdowns could worsen the declining trend in Nigeria's crude oil production, an oil industry analyst said.

"This is a real cause for worry because it's affecting our production," said Basil Onugu, an oil industry analyst and consultant.

The report came less than a week after Nigeria's Department of Petroleum Resources said the country was losing 1.06 million barrels per week or about 150,000 b/d to the shutdown of flow stations last month.

During a visit to the United States last week, Nigerian President Olusegun Obasanjo, announced that the country would raise its oil supplies to the America to 15% up from its current level of just 7%.

Obasanjo also announced that Nigeria planned to raise its crude oil production to 4 million b/d, up from 2.5 million b/d now.

However, Onugu says the current spate of shutdowns of oil installations poses a threat to that goal. "With this type of development, how can we achieve that target?" he asked.

The latest losses in Nigeria's crude oil production have added to the list of shut-in production, which has lingered since July 2003, when ethnic fighting in the western Niger Delta forced oil majors there to suspend production.

Although some of the affected facilities have since been reopened, some belonging to ChevronTexaco have remained shut. Attempts by the company to reopen some of the facilities earlier this year led to the killing of seven oil workers, including two U.S. citizens, by militants in the area.

-By Vincent Nwanma; Dow Jones Newswires; +234-1-585-0849; vinwanma@beta.linkserve.com