The Shell Petroleum Development Company (SPDC), operator of the SPDC/JV comprising the Nigerian National Petroleum Corporation (NNPC), Royal Dutch Shell, Total and the Nigerian Agip Oil Company (NOAC) Friday announced “the initiation of a strategic review, consultation with partners, and the potential exit from the interests it holds in some further onshore leases in the Eastern part of the Niger Delta, subject to partner and regulatory approvals.”
Also, Friday, the SPDC/JV said it had taken the Final Investment Decisions (FIDs) for two projects whose capital investment is worth $3.9billion.
Confirming this development in a statement yesterday, Shell’s corporate media relations manager, Mr. Tony Okonedo, identified the two projects whose FID had been taken as the Trans Niger Pipeline loop-line (TNPL) and the Gbaran-Ubie Phase Two projects.
He disclosed that the total capital investment for the two bundles of projects was around $3.9 billion.
The Managing Director of SPDC and Country Chairman of Shell Companies in Nigeria, Mr Mutiu Sunmonu, stated that the new projects had demonstrated Shell’s long term commitment to Nigeria by clearly signalling its intent for the strategic direction of Shell in Nigeria.
The Trans Niger Pipeline (TNP) is important for Nigeria, pumping some 180,000 barrels per day of crude oil to the Bonny Export Terminal and is part of the gas liquids evacuation infrastructure, critical for continued domestic power generation (Afam VI power plant) and liquefied gas exports.
Sunmonu also stated that sections of the TNP had been heavily impacted by sabotage and crude oil theft.
According to him, the design of the TNPL includes improvements, which make the pipeline better protected against crude oil theft and sabotage.
This, Sunmonu said should help to reduce pollution related to criminal activity, which was a key aspect of a 2011 United Nations Environment Programme (UNEP) report on Ogoniland.
The total capital investment for the TNPL project bundle is expected to be $1.5 billion, he said.
The Gbaran-Ubie Phase Two project consists of five gas supply and infrastructure projects which are critical for the continued gas supply to the Nigeria Liquefied Natural Gas (NLNG) plant and the Gbaran-Ubie domestic power plant (IPP).
The total investment for the Gbaran-Ubie Phase Two bundle is $2.4 billion. The expected peak production from these projects is 215,000barrels of oil equivalent per day.
“These investments will help to secure energy supplies for domestic and international markets. The TNPL project demonstrates the tangible steps SPDC and its partners are taking to tackle the scourge of criminal activity – pipeline sabotage and crude theft in the Niger Delta, which is the cause of so much environmental and economic damage in this region,” Sunmonu said.
SPDC, which is 100per cent-owned by Shell has also announced the initiation of a strategic review, consultation with partners, and the potential exit from some onshore oil blocks it holds in the Eastern part of the Niger Delta.
The company however said the exit from the onshore leases was subject to the approval of the other partners and the regulatory authorities.
The SPDC joint venture produced around 750,000 barrels per day of oil and gas in 2012 from 28 Oil Mining Licenses (OMLs) across the Niger Delta, both onshore and in the near offshore.
SPDC said it had been following a strategy of selective divestments of its onshore portfolio, concentrating the operating footprint into a smaller, more contiguous area, “while supporting the Federal Government’s policy of encouraging investment by indigenous companies in the Nigerian oil and gas industry”.
According to the company, since 2010, SPDC has sold its interest in eight OMLs for a total of $1.8 billion.
“Nigeria remains an important part of Shell’s portfolio, with clear growth potential, particularly in deepwater and onshore gas. This strategic review marks another step in re-focusing the SPDC portfolio,” Sunmonu commented.
Source: ThisDay