Forbes/AFX News Limited: Shell starts production at massive new Nigerian field UPDATE: "Development of the Bonga field was hit by long delays and cost overruns, but Shell now hopes to rapidly reach peak capacity and boost the west African country's total oil production by 10 pct.": Monday 28 November 2005

LAGOS (AFX) - Anglo-Dutch oil giant Royal Dutch Shell PLC said it has begun pumping oil from a massive new field off the coast of Nigeria which will produce 225,000 barrels per day.

Development of the Bonga field was hit by long delays and cost overruns, but Shell now hopes to rapidly reach peak capacity and boost the west African country's total oil production by 10 pct.

Shell said the total cost of bringing the offshore field onstream was 3.6 bln usd. The company had originally hoped to begin production in 2003 for 2.5 bln usd.

'The project targets an increase of around ten per cent in Nigeria's oil production and around a twenty-five per cent increase in Shell operated production in the country,' said Malcolm Brinded, executive director of Shell Exploration and Production.

Oil majors are increasingly moving away from onshore production in the sabotage-prone Niger Delta to offshore finds like Bonga, which can now be exploited thanks to new drilling and storage technology.

Production in Bonga will focus on a floating oil rig and storage ship known as a floating production, storage and offloading vessel or FPSO.

Anchored to the ocean floor 120 kilometres off the delta coast, the giant tanker is at the centre of a network of 12 oil wells on the sea floor 1,000 metres below.

Oil and gas is pumped to the surface and stored on board the FPSO, from where it is transferred directly to tankers for export to Europe and the Americas.

dc/nb/cmr

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