LONDON/LAGOS, June 21 (Reuters) - Royal Dutch/Shell is considering a further reduction in its oil production in theeastern Niger Delta, where decades of spills and oil thefts havedamaged the region's environment and the reputation of thecompany.
Nigeria's government wants more of its oil and gas ownedeither by the state oil company or local firms, raising concernsamong foreign oil majors they may lose smaller assets fornothing if they don't sell now, industry experts say.
Shell's Nigerian subsidiary, the Shell Petroleum DevelopmentCo. of Nigeria Ltd. (SPDC), announced a strategic review of itsbusiness on Friday, saying it would consult with itsinternational and Nigerian partners over the future of the 28leases that produce some 750,000 barrels a day of oil.
Shell has already sold eight Niger Delta licences for atotal $1.8 billion since 2010. Earlier this week U.S.-basedChevron Corp said it would sell five Nigerianshallow-water oil blocks.
Foreign oil companies have suffered from widespread oiltheft and at-times difficult relationships with localcommunities, driving up the costs of operating there, while along-delayed energy bill is stuck in parliament, adding toindustry uncertainty.
Shell's review of its Niger Delta oil licences camealongside a decision to go ahead with two other investments inthe west African country - the Trans-Niger Pipeline loop-line(TNPL) and Phase Two of the Gbaran-Ubie gas project, whichtogether will cost around $3.9 billion.
The pipeline investment is aimed at better protecting itagainst the thefts and sabotage it suffers. As recently asThursday this week, Shell shut the Trans-Niger Pipeline after anexplosion and fire at what it called a "crude oil theft point".
The Gbaran-Ubie gas project is slated to maintain suppliesto the Nigeria Liquefied Natural Gas plant and to theGbaran-Ubie power plant.
SPDC Managing Director, Mutiu Sunmonu said: "Today'sannouncements demonstrate our long term commitment to Nigeria byclearly signalling our intent for the strategic direction ofShell in Nigeria."
