Continued militancy in the Niger Delta, Nigeria’s oil and gas belt despite a government programme to retool restive youths has helped driven down Royal Dutch Shell’s global profit margin for 2013 by as much as 32 per cent.
The Holland based company stated in its annual financial report released yesterday noted that profits were hurt by lower earnings in Q3 2013 due to disruption in its Nigerian production.
Shell is one of the leading majors in the Nigerian petroleum industry and has had running community related battles in the Ogoni homelands, where indigenes accuse it of gross negligence.
The late writer and environmentalist, Ken Saro-Wiwa was killed in 1995 by Nigeria’s military junta head of state, late General Sani Abacha for his role in youth restiveness against oil exploration in the region.
“We are facing headwinds from weak industry refining margins and the security situation in Nigeria, which continue to erode the near-term outlook,” said Peter Voser, outgoing chief executive.
Former Nigerian president, late Umaru Musa Yar’Adua granted amnesty to militants in the Niger Delta in a bid to shore up production after daily crude oil output fell below 10 per cent from its high 2Bpd levels. But lately, the youths have resumed some activities in the oil region leading to shut downs in major fields.
Last week, a major refinery based in Warri, in the region reported some explosion which militant group, MEND (movement for the emancipation of the Niger Delta) claimed responsibility, although that has been denied by authorities and other youth groups in the region who claim MEND is moribund.
The region is also a hotbed of piracy and crude oil thefts is now a thriving business assuming monumental proportions.
Shell is specially targeted in the Ogoni lands where its holds the bulk of exploration. The company claimed in its financial statement that it has reduced production in Nigeria to about 65, 000 bpd, bringing cost to $300 million.
Ben Van Beurden, the company’s head of refining business is expected to take the reins of leadership from Voser at the end of December.
Elsewhere, America’s biggest petroleum company, ExxonMobil reported a-three month’s earnings of $8 billion despite reporting a quarterly loss of 18 per cent from 2012.
In its Q3 2013 financial report released Thursday, ExxonMobil which also operates from fields in Nigeria’s Niger Delta region said income at end of September stood at $7.87 billion.
Comparatively, it earned $9.57 billion in the same period last year bringing a revenue dip of two percent ($112.37B).