Lagos (Platts)--29Jul2009

OPEC member Nigeria has lost about Naira 7 trillion ($6 billion) in oil
revenues to the production shut-ins by Anglo-Dutch major Shell in the past
three years due to attacks on the company's facilities by Niger Delta
militants, local media reported Wednesday.

Mutiu Sunmonu, MD of Shell Petroleum Development Company, disclosed the
losses at the ongoing Senate public hearing on the draft petroleum bill in
Abuja, according to the Nigerian Compass newspaper reports.

Shell, Nigeria's biggest oil producer, was producing around 1 million b/d
as at end-2005 before militant groups in the Niger Delta launched their
violent campaign in early 2006 against Nigeria's oil industry to gain control
of the region's oil wealth.

Sunmonu told the Senate that SPDC's onshore oil joint venture was
producing at less than 30% of capacity due to the unrest in the Niger Delta
and funding problems, the newspaper reported.

Following the output losses, Shell declared force majeure on oil loadings
from both the Bonny and Forcados export terminals.

The public hearing on the petroleum bill, which began on Monday, provided
oil industry operators in Nigeria an opportunity to present their views on the
legislation that would impact significantly on their operations in the West
African country.

The proposed legislation would restructure state-run Nigerian National
Petroleum Corp--which operates joint ventures with the foreign oil
companies--into a profit-driven company. In its present draft, the
legislation would allow the government to renegotiate old contracts, impose
higher fees on oil companies and retake acreage that private companies have
failed to explore.

Industry operators complain that although the companies backed the reform
plans necessary to boost Nigeria's oil and gas reserves, they had not been
consulted in the drafting of the bill.

The head of Shell companies in Nigeria, Basil Omiyi, said at the hearing
on Tuesday, during a presentation on behalf of foreign oil companies operating
in Nigeria, that the industry needed more time to present economic analysis
which should be taken into consideration.
--Staff, newsdesk@platts.com