FG orders NNPC to take over all oil wells from Shell Nigeria.

The federal government of Nigeria under the leadership of president Muhammadu Buhari today ordered that all oil wells operated by Shell Petroleum Development Company be taken over with immediate effect by the Nigeria National Petroleum Corporation. Reasons for the take over is yet unknown as at the time of filling this report.

Shell Nigeria is the common name for Royal Dutch Shell`’s Nigerian operations carried out through four subsidiaries—primarily Shell Petroleum Development Company of Nigeria Limited (SPDC). Royal Dutch Shell’s joint ventures account for more than 21% of Nigeria’s total petroleum production(629,000 barrels per day (100,000 m3/d) (bpd) in 2009) from more than eighty fields.

Shell started business in Nigeria in 1937 as Shell D’Arcy and was granted an exploration license. In 1956, Shell Nigeria discovered the first commercial oil field at Oloibiri in the Niger Delta and started oil exports in 1958. Prior to the discovery of oil, Nigeria like many other African countries strongly relied on agricultural exports to other countries to support its economy. Many Nigerians thought the developers were looking for palm oil.

In July 2013, Shell Nigeria awarded Kaztec engineering Limited a $84.5 million exploration and production contract for the Trans-Niger oil pipeline. On March 25, 2014, Shell Nigeria declared a force majeure on crude oil exports from its Forcados crude oil depot which stopped operations due to a leak in its underwater pipeline, a clause freeing the company from contractual obligations as a circumstance beyond its control happened. While it struggled repairing the pipeline, Royal Dutch Shell announced a force majeure on Nigerian crude oil exports. Uzere was the second place where oil was discovered. Olomoro was the third place, before oil discovery spread across most places in the Niger Delta region.

Shell Petroleum Development Company (SPDC) is the largest fossil fuel company in Nigeria, which operates over 6,000 kilometres (3,700 mi) of pipelines and flowlines, 87 flowstations, 8 natural gas plants and more than 1,000 producing wells. SPDC’s role in the Shell Nigeria family is typically confined to the physical production and extraction of petroleum. It is an operator of the joint venture, which composed of Nigerian National Petroleum Corporation (55%), Shell (30%), Total S.A. (10%) and Eni (5%). Until relatively recently. It operated largely onshore on dry land or in the mangrove swamp.


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