One of the global energy giants, Shell has said its production in Nigeria dropped by a quarter in 2022 as it continues to fight insecurity and crude oil theft.
This was disclosed in the organisation’s annual report released on Thursday accessed by BusinessDay.
According to the report, the company said its share of production, onshore and offshore, in Nigeria declined to 131,000 barrels of oil equivalent per day (boe/d) in 2022, from 175,000 boe/d in 2021.
“Security issues, sabotage and crude oil theft in the Niger Delta continued and remained significant challenges to our onshore operations in 2022, leading to a significant reduction of crude available for export from the Bonny terminal for several months,” the report reads.
Shell stated that it would keep a close eye on the situation and assess the effects on the reliability of its infrastructure and the viability of its business sustainability.
It said, “We continue to put the safety of our employees and contractors first. In our Nigerian operations, we face various risks and adverse conditions which could have a significant adverse effect on our operational performance, earnings, cash flows and financial condition.”
In keeping with its Powering Progress strategy, Shell had stated in 2021 that it intended to minimize its involvement in onshore oil production in Nigeria.
In its annual report, it noted that two offshore oil blocks, OML 118 and OML 133, had been extended for another 20 years after Nigerian National Petroleum Corporation and the parties to the Production Sharing Contracts settled their differences regarding the “historic allocation of production” in the previous year.
The company further added, “Authorities are investigating our involvement in Nigerian oil Block OPL 245 and the 2011 settlement of litigation pertaining to that block.”