Shell-shocked in Nigeria
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TABJ – Feb 22 - Shell Petroleum has blamed its divestment in several rig assets in Nigeria on the high cost of doing business in the country and the levels of political risk.
Ian Craig—Executive Vice President of the sub-Saharan African sector of Shell Exploration and Production Africa Ltd.—spoke at the Nigerian Oil and Gas (NOG) conference in Abuja and said that compared to Angola, Nigeria’s deepwater development was well below its full potential.
“A typical land-based well costs about $20 million to drill in Nigeria; deepwater costs can be well over $100 million,” he stated.
“One is not enough to prove a prospect; you normally need several appraisal wells to be sure that a discovery is viable.”
He noted that Shell was not adverse to risks but said that the company had made several efforts to minimise the potential impact of these risks.
“Before we sink billions of dollars into projects that may take a decade to return to capital, we try to ensure that necessary fiscal, legal and political structures are in place,” he said.
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