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Shell shuts key Nigeria pipeline to repair oil theft damage

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(Globalpost/GlobalPost)

Shell has shut a key oil pipeline in southern Nigeria to repair damage caused by oil thieves, leading to a cut of around 150,000 barrels per day, the company said Wednesday in a statement.

The Nembe Creek Trunkline in Nigeria, Africa's biggest oil producer with output at about two million barrels per day, will be closed for an undisclosed period.

"The Shell Petroleum Development Company of Nigeria Ltd (SPDC) shut down the Nembe Creek Trunkline (NCTL) on Monday (15th April) to remove crude oil theft connections and investigate suspected oil theft leaks," it said.

"Production of some 150,000 barrels of oil per day has been deferred due to the shutdown. As a result, SPDC has declared force majeure on Bonny Light export," the statement added.

SPDC is Nigerian subsidiary for the Anglo-Dutch firm.

The 97-kilometre (60 miles) NCTL pipeline has been closed several times as a result of crude oil theft leaks and fires between December 2011 and May 2012, it recalled.

Oil theft has been estimated as costing Nigeria some $6 billion (4.7 billion euros) per year.

The pipeline was shut for 10 days last month following a major leak of Bonny Light crude, one of the main grades of crude oil produced in Nigeria.

The company had then declared force majeure, a legal term releasing it from contractual obligations due to circumstances beyond its control.

The company removed 157 points of sabotage on its pipelines last year, but 90 points still exist, the company earlier said.

"We're concerned that the NCTL has been targeted by crude oil thieves repeatedly since we installed the new line in 2010 at a cost of $1.1 billion," said Managing Director of SPDC Mutiu Sunmonu in the statement.

"The current exercise aims to remove a significant number of oil theft connections and repair any leaks on the pipeline," he said.

"Crude theft continues to affect people, the environment and the economy, and urgent action is needed by all stakeholders to tackle the problem," Sunmonu saids.

Last month, he said that oil theft in Nigeria had reached unprecedented levels, rising to 60,000 barrels per day for Shell alone.

A 2009 amnesty deal led to a sharp decline in unrest in the oil-producing Niger Delta region, but criminal activity has since flourished.

While Shell blames most of the spills on sabotage, activists argue that the company does not do enough to prevent such incidents and effectively clean up the damage when they do occur.

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http://www.globalpost.com/dispatch/news/afp/130417/shell-shuts-key-nigeria-pipeline-repair-oil-theft-damage