Shell to shut key Nigeria pipeline to repair oil theft damage

Shell plans to temporarily shut a key oil pipeline in southern Nigeria later this month to repair damage caused by oil thieves, leading to a cut of around 150,000 barrels per day, the company said Tuesday.

The Nembe Creek Trunkline in Nigeria, Africa's biggest oil producer with output at around two million barrels per day, will be closed for a nine-day period.

The pipeline has been repeatedly hit by sabotage and theft. Oil theft has been estimated as costing Nigeria some $6 billion (4.7 billion euros) per year.

"We plan to shut it down this month to remove some bunkering points," said Precious Okolobo, spokesman for the Shell Petroleum Development Company (SPDC), a Nigerian subsidiary for the Anglo-Dutch firm.

Bunkering is the local term for oil theft.

"In April, we will shut down the entire NCTL for a nine-day period to remove a number of bunkering points, which of course is a massive deferment of oil but needs to be done," said Jurgen Jonzen, SPDC corporate pipeline asset manager.

Shell declined to provide the exact days of the shutdown of the pipeline.

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 planned closure of the pipeline this month was programmed for its regular maintenance, contrary to the earlier one which was decided as an emergency measure, said Jonzen.

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

SPDC managing director Mutiu Sunmonu said last month 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.

Source: http://www.spacedaily.com/reports/Shell_to_shut_key_Nigeria_pipeline_to_repair_oil_theft_damage_999.html

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