SPDC Sets Out its Future Intent for Nigeria
SPDC Sets Out its Future Intent for Nigeria
AsiaNet 53480
PORT HARCOURT, Nigeria, June 22, 2013/PRN=KYODO JBN/--
The Shell Petroleum Development Company of Nigeria Ltd (SPDC) as operator
of the Nigerian National Petroleum Corporation (NNPC)/SPDC joint venture (SPDC
JV) today announced that the SPDC JV (NNPC 55%, SPDC 30%, TOTAL 10%, NAOC 5%)
has taken final investment decisions for the Trans Niger Pipeline loop-line
(TNPL) and the Gbaran-Ubie Phase Two projects, both in Nigeria's eastern Niger
Delta. The total capital investment for the two bundles of projects is around
$3.9 billion. SPDC has also announced today a strategic review of the
interests that it holds in selected onshore leases in the SPDC JV.
SPDC Managing Director, Mutiu Sunmonu said: "Today's announcements
demonstrate our long term commitment to Nigeria by clearly signaling our intent
for the strategic direction of Shell in Nigeria."
New investment in Nigeria oil and gas
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.
Sections of the TNP have been heavily impacted by sabotage and crude oil
theft. The design of the TNPL includes improvements which make the pipeline
better protected against crude oil theft and sabotage, which 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.
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 kboe per day
(100%).
Mutiu Sunmonu commented: "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."
Strategic review of SPDC interests in selected onshore leases
Today, Shell's 100%-owned subsidiary, SPDC, 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. The SPDC JV produced
around 750 kboe 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 has
been following a strategy of selective divestments of its onshore portfolio,
concentrating the operating footprint into a smaller, more contiguous area,
while supporting the Government's policy of encouraging investment by
indigenous companies in the Nigerian oil and gas industry. Since 2010, SPDC has
sold its interest in eight OMLs for a total of $1.8 billion.
Mutiu Sunmonu further commented: "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."
Notes for editors
The Shell Petroleum Development Company of Nigeria Ltd (SPDC) is the
operator of an unincorporated joint venture (SPDC JV) with the Nigerian state
oil company NNPC, Total E&P Nigeria Limited ("TOTAL") and Nigerian AGIP Oil
Company Limited ("NAOC").
TNPL is proposed to be executed by three indigenous contractors who have
grown steadily over the past five years from medium sized companies to big
players in the industry. The construction of the Gbaran-Ubie Phase Two project
includes local and international companies. The estimated Nigerian Content
value in terms of in-country manpower, goods and services that will be utilized
in the execution of these projects is over 66%.
The social and economic benefits to the local communities are substantial.
Aside from direct employment, many of the sub contractors will come from the
local communities in line with the JV partners' local content commitment to
develop capabilities within the Niger Delta region. There will also be direct
social investment in skills growth and direct investment via the Global
Memorandum of Understanding (GMOU) model.
Figures for oil & gas production and capital investment in this press
release are shown on a 100% joint venture basis.
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SOURCE: Royal Dutch Shell plc
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