• 3 minutes Could Venezuela become a net oil importer?
  • 7 minutes Reuters: OPEC Ministers Agree In Principle On 1 Million Barrels Per Day Nominal Output Increase
  • 12 minutes Battle for Oil Port: East Libya Forces In Full Control At Ras Lanuf
  • 4 hours Could Venezuela become a net oil importer?
  • 1 hour Reuters: OPEC Ministers Agree In Principle On 1 Million Barrels Per Day Nominal Output Increase
  • 8 hours Tesla Closing a Dozen Solar Facilities in Nine States
  • 14 hours Saudi Arabia plans to physically cut off Qatar by moat, nuclear waste and military base
  • 4 hours Gazprom Exports to EU Hit Record
  • 8 hours Why is permian oil "locked in" when refineries abound?
  • 6 hours EU Leaders Set To Prolong Russia Sanctions Again
  • 4 hours Oil Buyers Club
  • 4 hours Could oil demand collapse rapidly? Yup, sure could.
  • 7 hours Oil prices going down
  • 2 hours Saudi Arabia turns to solar
  • 1 day Teapots Cut U.S. Oil Shipments
  • 22 hours Battle for Oil Port: East Libya Forces In Full Control At Ras Lanuf
  • 8 hours EVs Could Help Coal Demand
  • 14 hours China’s Plastic Waste Ban Will Leave 111 Million Tons of Trash With Nowhere To Go
  • 1 day Hot line, Macron: Phone Calls With Trump Are Like Sausages Best Not To Know What Is Inside
Alt Text

China Plans To Create A $78 Billion Natural Gas Giant

Chinese regulators are looking to…

Alt Text

Permian Discount Could Rise To $20 Per Barrel

Midstream constraints plaguing Permian drillers…

Nick Cunningham

Nick Cunningham

Nick Cunningham is a freelance writer on oil and gas, renewable energy, climate change, energy policy and geopolitics. He is based in Pittsburgh, PA.

More Info

Trending Discussions

Shell’s Troubles in Nigeria Continue

Shell’s Troubles in Nigeria Continue

Royal Dutch Shell is in the midst of a flurry of sell offs to fix its balance sheet, unloading billions of dollars of assets as quickly as it can. Shell reported fourth quarter earnings that were highly disappointing to its shareholders, posting a 71% decline in net-profit. It also reported that oil production declined by 5% in 2013, owed much to instability in the Niger Delta. Shell’s problems worsened this week – it was forced to shut down a major pipeline in Nigeria to stop leakage and theft, a blow to a company that hoped to right the ship.

"We closed the Nembe Creek Trunkline on Sunday for the removal of crude theft points. We plan to complete the exercise and reopen the line as soon as possible," a spokesman of Shell Petroleum Development Co. of Nigeria, Precious Okolobo, said, according to Dow Jones Newswires.

Related Article: Shell’s Asset Purge to Hit UK North Sea

Although it is unclear how much oil will stop flowing due to the pipeline closure or for how long, the pipeline does carry 150,000 barrels of oil per day. Local media estimate that 95,000 bpd may have been cut off. Shell has already had to replace the pipeline due to theft and sabotage – it spent $1.1 billion to fix it up in 2010. The head of Shell’s Nigerian unit said last year that attacks on the pipeline meant that “more than 60,000 barrels of oil are being stolen a day, resulting in frequent production slowdowns and massive oil spills blighting the ecosystem.” Theft of oil cost Nigeria an estimated $6 billion per year.

The latest troubles in Nigeria add to Shell’s problems, which has been plagued by insecurity in the Niger delta for years. It was implicated in human rights violations in the 1990’s for its cooperation with the Nigerian government as it violently suppressed local opposition. Shell has also been accused of excessive gas flaring and oil spills, and as a major player in the horribly contaminated Niger Delta, Shell is reviled by many in Nigeria. In fact, the Nigerian government is seeking $11 billion in damages resulting from Shell’s spill of thousands of barrels of oil at its Bonga facility in 2011.

But the company could soon be rid of the headache – it is selling the 60-mile Nembe Creek pipeline. It is also selling a 30% stake in four Nigerian oil blocks. Shell already sold off $1.8 billion in assets in Nigeria since 2010. Whoever buys the fields in auction will have a bear of a problem trying to safely produce oil in the region. However, with Nigeria holding vast oil reserves, Shell won’t have trouble finding suitors.

Related Article: Nigerian Company to Sue Total, Samsung

Meanwhile, Shell is scrambling to sell off assets, which will transform it into quite a different company than what it once was. It sold off $1 billion in offshore assets in Brazil. It sold a refinery and refueling stations in Australia for a total of $2.6 billion. It also agreed to sell its retail assets in Italy to Kuwait Petroleum International. And it is planning on selling three oil and gas fields in the North Sea. All together, the asset sales put Shell on course to meet its goal of selling off $15 billion worth of assets by 2015. Some analysts even think they will go further and raise that target.

Shell is looking to shrink in size to a leaner and more efficient company. Shell will reduce capital expenditures from $46 billion to $37 billion this year, and its CEO has vowed to take a more cautious approach.

By Nicholas Cunningham of Oilprice.com




Back to homepage

Trending Discussions


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News