The threat by militants to cripple Nigeria’s oil export is gradually being actualised as Shell Petroleum Development Company of Nigeria Limited (SPDC) has suspended its entire operations in the Western Niger Delta, covering Delta State and parts of Bayelsa State, THISDAY has learnt.
With this development, only the company’s activities in the Eastern Niger Delta are sustaining its field operations in the country – but the Federal Government has moved to douse claims by militants that the amnesty offer to them was a “Greek Gift”.
The troubled oil major had in 2006 pulled out of the area but later launched a gradual re-entry programme, culminating in the re-opening of the giant 450,000 barrels per day Forcados export terminal.
The company also made remarkable progress in an effort to re-open 115,000 barrels per day EA facility and had also embarked on various community development projects.
But THISDAY gathered that owing to the renewed attacks on its facilities and workers especially in the last six months, Shell last week abandoned its re-entry programme and suspended its operations as well as all community development projects in the area.
A top official of the company told THISDAY at the weekend that the company hinged its decision to withdraw its staff and contractors from the Western Niger Delta on five major attacks it suffered in the area between January 7 and June 17, 2009.
He identified the five incidents to include an attack on Utorogu-UPS trunk line on January 7; the Amukpe-Rapele manifold attack of January 11; the Trans Escravos-Forcados River manifold attack of February 28; the Trans-Forcados pipeline (Chanomi Creek manifold) attack of June 12; and the militant attack on Trans Ramos pipeline on June 16.
He said: “These (suspension of operations) will impact on contractors; it will impact on Federal Government revenues and it will impact on our revenues.”
In a confidential document obtained by THISDAY, SPDC said that its operations in Nigeria and those of other international companies operating both onshore and offshore have continued to be impacted by the security situation in the Niger Delta.
Part of the document reads: “As always, the safety of our staff and contractors is our top priority. We are closely monitoring the situation and continue to take all necessary measures to ensure their safety. We have evacuated non-essential staff from key facilities in the western Niger Delta in order to ensure their safety, and regrettably, this means that our community development projects in the Western Niger Delta are slowing down.
“With increasing attacks in the field, it is very unsafe for staff and contractor personnel to maintain production and also implement community development projects. It is obvious that community development projects cannot continue in this atmosphere. This does not lessen our commitment to these projects, but we will not put our staff and contractors in unnecessary danger.
“We have made good progress in the recovery of production in the Western Niger Delta over the last one year but recent attacks by militants have resulted in substantial production losses and impacted progress on this project. The production from EA field (115,000barrels per day) remains shut since early 2006 and we have no firm date for resumption of operations. We are engaging the Delta State Government, contractors and communities. We remain committed to working with the government and local communities, but as always in everywhere we operate, the safety of our staff and contractors is the top priority of SPDC.
“We will continue to assess the security situation based on information at our 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 indicate it is safe for us to do so.”
When THISDAY contacted Corporate Media Relations Manager and Shell’s spokesman, Mr. Tony Okonedo, over the issue, he said: “Indeed, I can confirm to you that we have had meetings with various stakeholders on the challenges we are experiencing on our operations. Many of those stakeholders, particularly communities, are sympathetic and have expressed their full support for us to return to full operations. But overall safety of our staff and contractors remain the top priority at SPDC.”
On the total volume of crude affected, Okonedo insisted that they do not provide daily production updates from the company’s operations.
Although Okonedo did not give the production figure, THISDAY gathered that apart from the 115,000 barrels per EA platform, the 450,000 barrels per day capacity Forcados Export Terminal is also affected.
Hope for early restoration of a substantial part of the company’s output in the western Niger Delta was dashed recently when it said that it had declared a force majeure on Forcados crude oil exports for the remaining part of June and July loadings.
Shell had on June 16 told its customers that crude shipments from Forcados would be disrupted for a fifth month in July as militants renewed its attacks on the company’s workers and infrastructure.
Force majeure is a legal clause that allows companies to miss export obligations owing to circumstances beyond their control.
According to the loading schedule, the initial force majeure declared on March 7, 2009 would have ended in April, while the oil major had planned to load up to eight cargoes of 950,000 barrels each in May, equivalent to around 245,000 barrels per day.
But the oil major later extended the force majeure following what its spokesman called a security situation in the Niger Delta, which necessitated a change to planned pipeline repairs.
He said: “We extended the Forcados force majeure to cover May. This extension followed a revision of the Trans-Escravos pipeline repair schedule due to the security situation in the field.”
Shell’s spokesman, Mr. Precious Okolobo, later said in a statement on June 16 that both June and July loadings had been deferred due to damage to Trans-Forcados Trunkline at Chanomi Creek in Delta State.
Being the first company to strike oil in commercial quantity in the Niger Delta with its attendant negative environmental impact, analysts say that both criminal and genuine agitators in the region now see Shell as the face of the “unwholesome policy of environmental degradation and resource exploitation”.
Shell, which for many years bestrode the Nigerian oil and gas industry like a colossus, and dictated to a large extent the pace of developments in the economy, has since lost its influential position as Nigeria’s number one oil producer to the United States oil major, ExxonMobil, the world’s largest publicly traded oil company.
Statistics show that from a record level of about 999,000 barrels per day of crude oil, nearly half of Nigeria’s total daily average production in 2003, Shell now accounts for less than 500,000 barrels per day of the country’s total production.
Yesterday, Federal Government moved to clarify its amnesty offer to militants in a move aimed at restoring peace to the troubled oil-producing region.
Media Coordinator of the Presidential Committee on Amnesty and Disarmament Dr. Timiebi Koripamo-Agary, said that contrary to a statement credited to the Movement for the Emancipation of the Niger Delta (MEND) and the Joint Revolutionary Council (JRC), an umbrella body for militants in the Niger Delta region, the imminent release of Henry Okah has no conditions attached to it.
She said instead, Okah, who is on trial in Jos, Plateau State, would be freed after diplomatic formalities had been concluded with the presidents of Angola and Equatorial Guinea.
In an email sent to the media, the groups had insisted that if the amnesty proclamation was directed at “freedom fighters” in which they belong, it would have addressed the root issues such as the genuine unconditional release of Okah and others.
Other issues that should have been addressed by the Federal Government, MEND said, include true federalism, federal character in political appointments, investigations of extra-judicial killings, a troop withdrawal time table, displaced civilians, reconstruction of their sacked villages, and their rehabilitation.
But Koripamo-Agary said: “The Federal Government has through the Amnesty offer demonstrated good faith in refusing to criminalise militants through derogatory terms.
“Militants and the Niger Delta youths know what is good for them and their communities and I believe they will make the right decisions for themselves and the progress and development of the Niger Delta and Nigeria.
“I wish to state that the offer of amnesty is unconditional and covers Okah who will be released as soon as the Federal Government concludes its consultations with the Governments of Angola and Equatorial Guinea. This is also in the best interest of Mr. Henry Okah.
“Mr. President has offered an olive branch which should be accepted to restore peace and development in the region which is of great concern to the militants and for which real steps are being taken by the government. The amnesty offer affords them the freedom and opportunity to engage in the dialogue that President Yar’Adua has promoted since he assumed office.
“I think aside the amnesty proclamation by Mr. President the fact that he is willing to personally receive any militant that surrenders demonstrates how willing and sincere the President is in ending this crisis.”
Jun292009