SHARES in Eland Oil & Gas have risen five per cent after the company announced it has restarted production in Nigeria, where it has been hampered by thefts of crude oil.

Aberdeen-based Eland Oil & Gas said production from the onshore Opuama field has recommenced and stabilised at a rate of more than 3,500 barrels oil per day.

The restart of production will provide a big boost to Aim-listed Eland.

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The Opuama field on the OML 40 licence is the only one it has brought onstream so far.

Run by a Scots veteran of the West Africa oil business, Les Blair, Eland expects to use the cash generated from Opuama to fund growth in Nigeria.

News of the restart of pro-duction comes three weeks after Eland agreed to acquire a 40 per cent stake in the onshore Ubima field for up to $10m (£6m), despite facing big challenges in Nigeria.

The day it announced the Ubima deal, Eland said pro-duction from Opuama had been interrupted while an illegal bunkering point was removed from a pipeline.

It said there had been a number of production interruptions since Opuama came onstream in February, including pipeline ruptures due to corrosion and illegal bunkering.

The theft of crude oil by thieves who tap into onshore pipelines costs companies operating in Nigeria huge sums.

Royal Dutch Shell has complained it lost nearly $1 billion through theft and various disruptions to its Nigerian oil and liquefied natural gas operations in 2013.

Opuama was shut in by Shell in 2006 amid security concerns.

However, in its interim results announcement earlier this month, Eland said it expected to enjoy more prolonged periods of stable production going forward.

The company has indicated it may buy more assets in Nigeria, amid moves by majors like Shell to reduce their exposure to the area.

Eland acquired a minority interest in the OML 40 licence in August 2012, in a deal with Shell, Total and Nigerian Agip worth around £95m.

Shares in the company closed up 5.5p at 105p, giving it a market capitalisation of around £142m.