Shell Shuts-In 169,000 bbl/d at Nigeria Bonny Terminal

LONDON, April 21, 2008 (Dow Jones Newswires)

Shell Petroleum Development Co. of Nigeria has shut-in around 169,000 barrels a day of crude production from its Bonny Light oil fields following an attack on a key pipeline which feeds-in to its export terminal, a spokesman for the company said Monday.

SPDC has declared a force majeure on its April, May oil delivery contracts from its 400,000 barrel a day Bonny fields effective Apr. 22, which indemnifies it from litigation if it fails to meet contractual obligations to buyers.

SPDC operates a joint venture involving Nigeria National Petroleum Corp. with a 55% stake, Royal Dutch Shell (RDSB) with a 30% stake, Total SA (TOT) with 10% and Agip, a unit of Italian oil company Eni SpA (E), with 5%.

The move to shut in some production from the fields follows an attack by an armed group on the Greater Port Harcourt Swamp pipeline in SPDC's eastern operations area, Rainer Winzenried, spokesman for SPDC, said Monday.

The Movement for the Emancipation of the Niger Delta, the militant group that lays claim to many of the attacks on oil infrastructure in Nigeria, said Friday it will step up its attacks on oil companies in the region, and said earlier Monday it had made two further attacks on oil facilities in the Delta.

Estimates vary but, at 500,000 barrels a day, the amount of oil capacity unavailable due to sabotage and security concerns is a fifth below Nigeria's potential, based on the International Energy Agency's estimate of effective production capacity of 2.47 million barrels a day. NNPC officials estimate its capacity is nearer 3 million barrels a day.

Prices for physical cargoes of key benchmark grade Nigerian oil on the spot market are already trading near record levels, according to traders of West African crude based in London, buoyed by extra demand for crude that can be converted in to sweet middle distillate productions.

LONDON, April 21, 2008 (Dow Jones Newswires)