Shell Shuts Flow Station, Withdraws 244 Workers
By Mike Oduniyi, Chinazor Megbolu and Gloria Achoyamen with Agency report
The fierce battle between armed militia group in the Niger Delta and military troops has started to take its toll on the country's crude oil production as Shell Petroleum Development Company announced yesterday that it had shut down a flowstation. The action will result in the loss of 28,000 barrels per day (bpd) of oil.
The closure of Shell's Santa Barbara flowstation and the attendant fears of major crude supply disruption contributed to Monday's sharp increase in prices of crude oil in the international market.
The Light sweet crude traded at $50.35 per barrel.
Nigeria is the seventh world's largest crude oil producer. Shell said in a statement yesterday that the security situation in the swamps of the eastern area of its operation is still tense, and the risk of water transportation is high.
"As a precautionary measure, we are constantly monitoring and assessing developments in order not to expose our staff and contractors unduly. Movement of staff and supplies in the creeks has been curtailed.
"We are beginning to experience some effect on our operations in the affected areas. The Santa Barbara flowstation, producing some 28,000 barrels per day, has been shut because we are unable to get staff there to rectify a technical problem," said Shell in the statement signed by the company's External Relations Director, Mr. Precious Omuku.
On the reported demands of the militia group, the Niger Delta People's Volunteer Force (NDPVF), that oil companies should stop production by October 1, while all foreigners are expected to leave the Niger Delta, Shell said it was taking additional precautionary measures for the safety of staff. We continue to appeal for the return of peace in the region.
"SPDC has not supplied maps to any group following this crisis, as has been reportedly alleged. Our maps have been statutorily published and are available to industry regulators. We also have smaller versions in our publications. As part of our business principles, we stay out of conflict and encourage dialogue in situations when we are in the position to do so," it stated.
THISDAY gathered that Shell has already withdrawn about 244 non-core workers from oil fields in the area.
But, as the militia group was poised to turn the heat on the oil firms, the Nigerian Agip Oil Company Limited (NAOC), yesterday denied reports linking it with provision of helicopters to support the Nigerian security agencies in their activities in the Niger Delta.
"The company has neither received any requests nor has it provided any helicopter for the use of any security agency in the Niger Delta or any other parts of Nigeria, for that matter. All our helicopters are licensed for civil use and are deployed exclusively for the business of oil and gas exploration and production," Agip said.
The NDPVF had on Monday night issied a communique telling companies operating in the nation's oil industry to shut production and withdraw their staff ahead of an "all-out war on the Nigerian state" due to start on Friday.
The latest oil production loss has raised Nigeria's total losses to some 200,000 bpd, following the closure of oil fields belonging to ChevronTexaco, Shell and Total in the Warri area of Delta State.
In monetary terms, the country could be losing about $10 million (N1.33 billion) per day.
The mounting unrest in the Niger Delta region is the latest of many factors troubling world oil markets. Others factors include instability in the Middle East, to hurricanes in the Caribbean and the pressure of stronger economic growth on global demand.
Also, the Organisation of Petroleum Exporting Countries n(OPEC) yesterday said it is worried about the potentially inflationary impact of soaring oil prices.
"At the moment, there's nothing we can do. OPEC has spare capacity, however, whatever we do there is no sensitivity in the market," OPEC President, Purnomo Yusgiantoro, said.
OPEC raised output earlier this year in response to pressure from developed industrial nations but the impact was short-lived. "If prices continue to go up there will be a danger to the global economy. I warn that high oil prices will result in the start of a recession," he said.
Meanwhile, the monitoring team of the Department of Petroleum Resources (DPR) yesterday sealed off three petrol filling stations in Lagos state for cheating. The affected stations were caught during a petrol station inspection conducted by DPR.
The sealed stations included two Conoil and African Petroleum petrol stations at Jibowu-Yaba and Onipanu area of Lagos respectively. The petrol stations were found to be shortchanging buyers by selling quantity below the amount paid.
At the petrol stations, the attendants were asked to measure ten litres using DPR's gauge it was however found out that the difference was much. At Conoil in Jibowu, consumers were cheated of about N34 for every ten litres bought, while the AP station in Onipanu consumers lost about N34.44k per ten litres sold. Conoil in Onipanu deprive buyers N30 worth of fuel on every 10 litres purchased.
Speaking at the end of the inspection, DPR's assistant director, Public Affairs, Mrs. Stella Ashibodu, said the monitoring was to ensure that the various retail outlets are selling at the controlled prices.
According to her, "we have seen in the past disparity of pricing, some marketers are selling at N52 and some others at N53 so, we would like to warn all marketers that in the coastal areas, they are supposed to sell at N52 per litre and the North Inland, they can sell at N54 per litre. We are just trying to ensure that the marketers are not profiteering at the expense of the Nigerian public," she said.
On the responsibility of DPR in petroleum products pricing, she said DPR has nothing to do with pricing as that is the responsibility of the Petroleum Products Pricing Regulatory Agency (PPPRA).
"We monitor the activities of oil companies both in the upstream and in the downstream sectors. So, what we are doing here is actually monitoring their operations to ensure that they are operating in line with the conditions of their licences," she said.
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