NIGER DELTA: SOARING LOSSES FOR THE FG

Following the incessant crises in the Niger-delta region over the control of oil wealth the federal government is losing more of its crude oil earnings as the Shell Petroleum Development Company (SPDC) one of the major multinationals operating in the upstream sector of the oil and gas industry has shut in more of its operations in the Eastern Axis (EA) of the Niger-delta.
This would see a huge reduction in federal and state government's revenue as much of these revenues depends more on crude oil export from the Eastern and Southern Axis of the Niger Delta.
It is of note that SPDC's operations and those of other international companies operating both onshore and offshore continues to be impacted by the security situation in the Niger Delta. Even as there continue to be increasing attacks on facilities.
The SPDC has shut down operations on its EA field since 2006 and there has been no firm date on resumption of operations even as the company claims to have made good progress in the recovery of production in the western Niger delta over the last year, while recent attacks by militants have resulted in substantial production losses and impacted progress on the project.
It was gathered that the impact on Shell's EA operations would among other things negatively affect Community development projects in the region as well as the Western re-entry project and also government revenues as the company has repeatedly stated that the safety of all its staff and contractors are of paramount importance to it and as such it has evacuated all non-essential staff from the troubled region.
The unrest in the region which has brought about a number of production shut-ins by SPDC and other multinationals operating in the region due to continuous sabotage on the pipelines and other production facilities may not receive immediate repair attention as the unrest has made it difficult for the multinationals to send in their engineers for the necessary repairs.
Shell has repeatedly made it clear that the safety of its staff and contractors are of serious importance as it could not jeopardize their existence and safety for any reason. Contacted , Spokesman for Shell, Tony Okonedo said that the company is currently engaging stakeholders on a way forward. ''While over-all safety of our staff and contractors continues to be a top priority for us, some of the communities have been quite helpful to us and have shown the willingness they have for us to come back to our operations.'' ''Indeed I can confirm that we have had meetings with several stakeholders in the challenges we're currently experiencing in our Western operations, and I can also add that many of those stakeholders particularly communities are sympathetic to our cause and have expressed their willingness to support us so we can commence operations again.''
He also said that all of the company's non-essential staff in some of the key facilities have since been evacuated since the beginning of the current crises in the Niger Delta between militants and the Joint Task Force (JTF).
Asked to give a figure on the current daily production updates, Okonedo stated that it is against the company policy to do such as the company does not release its daily production figures.''We don't provide daily production updates from our operations as this is a standard policy for us not to do so.''
Further findings revealed that the company may be stopping all community development projects in the region with impact on Contractors and government in view of the increasing attacks on its installations.
This has made it unsafe for staff and contractors working on Shell's projects in the region to maintain production and also implement community development projects. ''It is obvious that community development projects can not continue in this atmosphere in view of these developments, even as the company claims to resume full operations immediately the situation resumes.
Regarding the Western re-entry project the company say's that it will continue to assess the security situation based on information at its disposal and input from relevant authorities, law enforcement agencies and local people.
''we will resume operations, only when careful considerations of security and safety of people indicates that it is safe for us to do so.''
It was further gathered that another multinational with operations mainly in the Western axis has warned that some 5000 jobs in the Niger-delta will be lost as they would be unable to maintain such employment opportunities with the present security situation.
Shell, only recently extended the force majeure on its Forcados offtake program for the remainder of June and July, due to persistent damage to the pipeline from the Chanomi creek, even as a significant part of the 450,000 barrels per day capacity of Forcados remains shut down since 2006.

......Olalekan Adeoye

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