Welder at the Gbaran-Ubie project,
Nigeria.
Security in Nigeria remained relatively stable during 2011. Shell-share production in Nigeria was some 385 thousand boe/d in 2011 compared with some 400 thousand boe/d in 2010.
Onshore
The Shell Petroleum Development Company of Nigeria Ltd (SPDC) is the operator of a joint venture (Shell interest 30%) that holds over 30 Niger Delta onshore oil mining leases (OMLs), which expire in 2019. To provide funding, Modified Carry Agreements are in place for certain key projects and a bridge loan was drawn down by the Nigerian National Petroleum Company (NNPC) in 2010.
The Gbaran-Ubie integrated oil and gas project (Shell interest 30%) came on-stream in 2010 in Bayelsa State and achieved peak gas production of 1 billion scf/d in early 2011. Gas from Gbaran-Ubie is delivered to power plants for domestic use and to Nigeria LNG Ltd (NLNG) for export. Oil production has reached some 45 thousand b/d.
In Nigeria Shell sold its 30% interest in oil mining leases 26 and 42 and related facilities in the Niger Delta for a consideration of some $0.5 billion. The assignment of its interests in respect of OMLs 34 and 40 is still awaiting requisite consents for completion.
Offshore
The main offshore deep-water activities are carried out by Shell Nigeria Exploration and Production Company (Shell interest 100%) with interests in three deep-water blocks. Shell operates two of the blocks including the Bonga field 120 km offshore. Deep-water offshore activities are typically governed through PSCs with NNPC.
Additionally, SPDC holds an interest in six shallow-water offshore leases, of which five expired on November 30, 2008. However, SPDC satisfied all the requirements of the Nigerian Petroleum Act, to be entitled to an extension.
LNG
Shell has a 25.6% interest in Nigeria LNG (NLNG), which operates six LNG trains with a total capacity of 21.6 mtpa. NLNG continued production at near full capacity during 2011, mainly as a consequence of improved gas supply due to stable security and the start-up of the Gbaran-Ubie project.
