Nigerian Fields take focus as Shell reviews Oil production

Shell Nigeria Gas (SNG) said it would continue to optimise its onshore footprint while investing in gas development in Nigeria. This came as the company commissioned an indigenous contractor, Gredor Nigeria Limited, to begin the construction of the gas pipeline infrastructure to deliver gas to the Nigeria Content Development and Monitoring Board Industrial Park in Polaku, Bayelsa State. SNG had earlier in the year acquired the lease of one hectare of land in Polaku for the gas project which will supply gas for industries in the park and the environs. The project is expected to be delivered within six months. Speaking at the commissioning, the Managing Director, SNG, Ed Ubong said the Polaku project would boost industrialisation in Bayelsa State and provide employment opportunity for skilled and unskilled local population in addition to directly improving internally generated revenues in the state. He said, “The project will increase the over 150 industrial and commercial customers in Nigeria who currently receive SNG’s supply of natural gas through gas infrastructure that we have built with our partners and local stakeholders.” Responding to the rapid expansion of SNG as distribution network, Country Chair, Shell Companies in Nigeria, Osagie Okunbor said Shell was positioned to continue to optimise its onshore footprint while investing in gas. “For more than 50 years, Shell has been in the forefront of the campaign to develop and monetise Nigeria’s huge gas resources. SNG continues to demonstrate leadership in this space, growing the domestic gas market and also helping to improve lives in every state it operates.” SNG recently completed 20 kilometres domestic gas pipeline expansion project in Abia State, connecting Agbor Hill, Osisioma and Ariaria industrial zones. The expansion project has enabled the supply of pipeline gas to Ariaria Market Energy Solutions Limited, the Independent Power Project (IPP) consortium that provides electricity to the popular Ariaria market in Abia State. Ariaria International Market is one of the largest leather shoe-making and open stall markets in West Africa, with over 37,000 shops and an estimated one million traders.
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Oil giant Shell is considering a major global review of its oil and gas production and is looking at sustaining production on few hubs in Nigeria to facilitate its new energy initiative.

Subsequently, the Shell Energy has announced that it will be making sweeping cuts to its oil and gas production business to free up cash to spend on renewable energy.

By cutting day-to-day operating costs and reining in spending on new projects, the energy firm hopes to slash costs by as much as 40 per cent.

As part of this operational shift, Shell will now focus much of its oil and gas production on a few key hubs, such as Nigeria, the Gulf of Mexico and the North Sea. The company will also trim costs at its 45,000 petrol stations.

The company’s restructuring has two purposes. Firstly, it will help the provider survive the COVID-19 crisis, which has hugely reduced the demand for oil.

Many analysts now believe that demand for fuel will never again reach 2019 levels, as the COVID-19 pandemic has grounded planes, taken cars off the road and disrupted industry. Secondly, the shift to renewables will also help the company prepare for the upcoming green ‘energy transition’.

For this reason, the shift to renewables is not just a structural shift, but a cultural one that will set the company up for the future.

Shell’s green ‘energy transition’ is a wider consideration for all energy suppliers. In recent months, energy firms have come under huge pressure to invest in renewables and move away from fossil fuels to help the UK reach its ‘net zero’ carbon emissions target by 2050.

In addition to this, the government is looking to incentivise suppliers to go green by placing a new levy on gas suppliers.

The Green Gas Levy which was initially proposed in the March 2020 budget aims to prevent as much as 21.6 million tonnes of carbon emissions from entering the atmosphere.

This is the equivalent of planting 71 million trees and the levy will also support the injection of renewable biomethane into the gas grid through the new Green Gas Support Scheme.

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