IBADAN, Nigeria (Dow Jones Newswires), May 20, 2008
President Umaru Yar'Adua has ordered the Nigerian National Petroleum Corp., or NNPC, to take immediate steps to recover over $1.9 billion from Royal Dutch Shell PLC (RDSB) and Exxon Mobil Corp. (XOM), an official spokesman said Tuesday.
Olusegun Adeniyi, presidential adviser on communication, told Dow Jones Newswires the money was due to the federal government under the production sharing contracts for the Bonga and Erha offshore oil fields.
The two fields account for 20% of the country's oil production, a statement by Nigeria's presidential office said. Over $1.26 billion is being claimed for the Shell-operated Bonga only, according to details released in the statement.
Adeniyi said a federal government committee conducted an investigation on some production sharing contracts over a specified period and discovered shortfalls in payments to the government, and said the sum is made up of $850 million from Bonga and $646 million from Erha.
Adeniyi said there is also a directive that the sum of $414 million accruable to the NNPC and to the government from Bonga gas sales should be recovered.
He said the government has also directed all future government gas sale agreements should account for natural gas liquids to ensure the government derives maximum economic benefits from them. Adeniyi said this position is to be adopted in the renegotiation of all existing production sharing contracts.
Shell wouldn't comment, while Exxon weren't immediately available for comment.
Bonga is the first deepwater project for Shell Nigeria Exploration and Production Co., Ltd., or Snepco, in Nigeria for Nigeria itself. It produces over 200,000 barrels a day. Gas from Bonga is piped to the Nigeria liquefied natural gas plant in Bonny Island.
Esso Exploration and Production Nigeria Ltd., or EEPNL, an affiliate of ExxonMobil operates the Erha deepwater oil field located approximately 97 kilometers offshore Nigeria in 1,200 meters of water.
It is EEPNL's first operated production from Nigeria's deepwater Block 209. Erha is expected to produce up to 150,000 barrels a day. It began operation in 2006.
Copyright (c) 2008 Dow Jones & Company, Inc.
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