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Shell Shuts Down Major Pipeline in Nigeria over Theft

Mon, 05/07/2012 - 5:59am
JON GAMBRELL,Associated Press

LAGOS, Nigeria (AP) — Royal Dutch Shell PLC said Friday it shut down one of its major pipelines running through Nigeria's oil-rich southern delta for repair, blaming incessant thefts on the line for causing chronic leaks along it.

The shutdown affects the Nembe Creek Trunkline and cuts off about 60,000 barrels of oil a day from Shell's production in the country, the company said in a statement. It also declared a "force majeure" warning — meaning it is impossible for the company to cover the promised supply from the field.

Shell's Nigerian subsidiary gave no estimates for how long the shutdown would last.

Shell "is working hard to repair the line and resume production as quickly as possible," the statement read.

The pipeline carries both Shell and other company's oil to Nigeria's Bonny Terminal for export abroad. It had been replaced in 2010, but in the time since, has become a huge target for thieves who use drills and hacksaws to attached spigots along the line to steal raw crude.

The thefts, locally called "bunkering," see crude later get sold into the black market or cooked into crude gasoline or diesel at makeshift refineries that dot the oil-rich Niger Delta. Shell officials previously have said as much as 150,000 barrels of crude a day is being stolen.

The bunkering likely continues because those in power in Nigeria personally benefit from the theft. A U.S. diplomatic cable leaked last year quoted a Nigerian official as saying that politicians, retired admirals and generals and the country's elite all take part.

Shell produced about 800,000 barrels of oil a day last year, with numbers rising as militancy in the region dropped off after a government-sponsored amnesty program in 2009. However, violence and kidnappings still occur in the region about the size of Portugal.

Nigeria, which produces about 2.4 million of barrels of oil a day, is a top crude oil supplier to the U.S.

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Online:

Royal Dutch Shell PLC: www.shell.com.

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Jon Gambrell can be reached at www.twitter.com/jongambrellap.

 

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