• Thursday, December 07, 2023
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Shell Nigeria’s oil output dips 22% on challenges

Bodo spills: We conduct our operations in a responsible manner – SPDC

Energy giant Shell has said its share of production, onshore and offshore, in Nigeria was 175,000 barrels of oil equivalent per day (boe/d) in 2021, down from 223,000 boe/d in 2020.

The company, in its annual report on Thursday, said security issues, sabotage and crude oil theft in the Niger Delta “failed to improve and remained significant challenges to our onshore operations in 2021.”

It said it would monitor the situation closely and evaluate implications for the integrity of its infrastructure and the sustainability of its current operations.

Shell said, “In our Nigerian operations, we face various risks and adverse conditions which could have a significant adverse effect on our operational performance, earnings, cash flows and financial condition.

“There are limitations to the extent to which we can mitigate these risks. We carry out regular portfolio assessments so we can maintain our long-term competitiveness in Nigeria.”

The company announced its intention to reduce its involvement in onshore oil and gas production in Nigeria, in line with its risk appetite.

Read also: Why Nigeria can’t meet OPEC oil production quota – Sylva

It said, “We are in discussion with the Nigerian government and other stakeholders on how this can be best achieved. In August 2021, Nigeria adopted the Petroleum Industry Act (PIA) that creates a new regulatory framework for the industry.

“The PIA introduces significant changes, some of which require clarification during the 18-month implementation phase. We are actively engaged to ensure that our operations will comply with any new requirements.”

According to the report, the company supports the Nigerian government’s efforts to improve the efficiency, functionality and domestic benefits of Nigeria’s oil and gas industry.

It said, “We liaise with host communities, governmental and non-governmental organisations to help promote peaceful and safe operations. We continue to be transparent about how we manage and report spills, and how we deploy oil-spill response capability and technology.

“We implement a maintenance strategy to support sustainable equipment reliability and have begun a multi-year programme to reduce routine flaring of associated gas,” the company states.

Shell Petroleum Development Company of Nigeria Limited (SPDC) is the operator of a joint venture (Shell interest 30 percent) that, after the completion of the sale of its interest in OML 17 on January 15, 2021, has 16 Niger Delta onshore oil mining leases.