On Friday, Royal Dutch Shell (NYSE:RDSA) announced its second force majeure breaking its Bonny Light Crude obligations, and said the slowdown of production in Nigeria would crimp profits. Royal Dutch Shell's share price reaction? Not a whole heck of a lot. The stock traded down during the day, but ended up - gaining roughly the same as the stock market as a whole. Obviously market news as opposed to company news was the bigger influence. So what's going on?

With the recent attacks, Nigeria is now producing around a million barrels less of the light, sweet stuff per day than it did in 2006. In 2007, oil from Nigeria accounted for 8.4% of U.S. imports - only three percentage points behind oil giant Saudi Arabia. Had this happened in a slow news cycle, Nigeria would be on every front page. But despite the relatively low media profile, if you hold oil stocks, especially Royal Dutch Shell, you might want to pay attention.

How important is the Niger Delta to Shell? It can be hard for individual investors to tell. Companies rarely, if ever, break down their statistics by country for their annual report, so it is hard to find data on exactly how much revenue comes from a single country. We do know that in 2007, 25% of Shell's revenue came from Africa, the Middle East, CIS [Commonwealth of Independent States] and Asia Pacific regions. According to the Wall Street Journal, investment bank Oppenheimer & Co. puts Nigeria responsible for about 4% of Shell's 2007 profit.

Nigeria is a tough, costly place to do business. A new government was installed last year, but President Umaru Yar'Adua may not be in the best of health, which makes his presence less than a stabilizing force. Agreements that were made with former governments are being renegotiated or reinterpreted to be much more favorable for the government and less favorable to the companies doing the work in country - a trick we've seen Crazy Uncle Hugo play to great effect down in Venezuela.