PETER CUNLIFFE-JONES, Lagos | Wednesday
ANGLO-Dutch oil group Shell is in the final stages of planning a massive new $7,5-billion (8,3-billion euro) investment in the Nigerian oil and gas sector, a company official said on Tuesday.
The money — if given final approval by the European company’s headquarters — would be invested over the next six years to 2008, coming on top of the $8,5-billion committed to Shell’s oil operations under a five-year plan announced in 1999.
“It is new money. It is under consideration. We are awaiting the final investment decision but this is certainly in the planning,” said a senior official, confirming newspaper reports.
The newspaper This Day reported on Tuesday that Shell was planning to invest $7,5-billion in Nigerian operations along with its partners in a major gas sector joint venture.
Shell, the largest foreign oil operation in Nigeria, is the main player in the multinational liquefied natural gas company Nigeria LNG, operated by Shell, the Nigerian National Petroleum Corporation (NNPC), French group TotalFinaElf and Italy’s Agip.
The Shell official said on Tuesday the money, if finally approved, would go first to building a fourth and fifth production unit at the LNG plant at Bonny in southeast Nigeria.
Part of the aim would be a reduction in the flaring-off of gas, an industry practice which is much criticised by environmentalists.
And another part of the money would be directed to increasing oil production.
The bulk of the 8,5 billion committed in 1999 has been directed to expanding Shell’s deep water and on-shore oil sector operations.
Nigeria is already the largest oil producer in Africa, and sixth largest oil exporter in the world, exporting around two million barrels of high quality crude oil a day, and plans to expand its production to around three million barrels by 2003, increasing reserves to 40-billion barrels from 25-billion.
In London, Shell said last month it had also agreed a $540-million contract to modernise, run and expand a 240 megawatt, gas-powered electricity plant at Afam in the southeast of Nigeria.
The company will increase output to 400 megawatts in 2002 and 930 megawatts by 2004, the company said.
The Nigerian government has held negotiations with a number of western oil companies in the past two years, seeking assistance to expand its feeble domestic electrical power industry.
Italy’s Agip, the subsidiary of the group ENI, last July signed an agreement to build a 450-megawatt gas-fired power plant in southern Nigeria. – AFP