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Shell’s Production in Nigeria Drops by 41%

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Global oil giant, Royal Dutch Shell, on Thursday said its liquids production available for sale in Nigeria plunged by 41 per cent in the second quarter of this year.

Shell announced a 72 per cent drop in second quarter earnings amid the continued weakness in global oil and gas prices.

The oil major’s liquids production available for sale in Nigeria was put at 37,000 barrels per day in the second quarter of this year, down from 63,000 bpd in the same period of 2015.

Total production by Shell Production Development Company of Nigeria Limited, its local subsidiary, stood at 128,000 barrels of oil equivalent per day, down from 163,000 boepd in the same quarter of last year.

A series of militant attacks in the Niger Delta targeted at oil and gas facilities belonging to oil majors, including Shell, Eni and Chevron, the Nigerian National Petroleum Corporation and Aiteo, has led to the shutdown of several fields in the country.

Currently, Forcados, Qua Iboe and Brass River crude oil grades are under force majeure, while Escravos and Bonny Light are facing significant loading delays.

“Earnings could be further impacted if the security conditions continue to deteriorate,” Shell said in its second quarter 2016 report.

This month, Shell shut the Trans Niger pipeline, which is one of the pipelines that carry crude to the Bonny Light Export Terminal, following a leak in Ogoniland.

Oil theft and sabotage are rampant in the Niger Delta. Militant groups have orchestrated a campaign of attacks on oil infrastructure this year that saw the nation’s oil production fall to its lowest in nearly three decades.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.