Shell fixes Nigerian pipeline

Channels Television  
Updated January 30, 2012

Royal Dutch Shell’s Nigerian venture has finished repairs to a damaged Nigerian oil pipeline and restored output, the company said on Friday, boosting supplies from Africa’s top exporter.

Shell fixes Nigerian pipeline

Shell Petroleum Development Co. (SPDC) had to shut down the 90-kilometre (56-mile) Nembe Creek Trunkline on December 24 after leaks caused by crude theft, delaying oil output of 70,000 barrels per day (bpd).

“Repair of the Nembe Creek Trunkline has been completed and production restored,” Shell said in an emailed statement. Earlier on Friday, the company said it aimed to finish the work before the end of January.

Shell said an investigation by government officials, Shell and community representatives found thieves had installed valves at two points on the line in Nembe, Bayelsa State. The company recovered more than 200 barrels of spilled oil.

“What is really worrying about this leak is that it happened on a facility which was commissioned in October 2009 to replace an old line which was repeatedly targeted by crude oil thieves,” said Tony Attah, a Shell official, quoted in the earlier statement.

Oil theft, known as bunkering in Nigeria, is rampant in the Niger Delta and often disrupts output. Thieves drill into pipelines that pass through winding creeks and waterways in the Niger Delta region.

The practice is thought to be worth hundreds of millions of dollars a year.

Nigerian oil is of high quality and significant supply disruptions can boost world prices. Nigeria is set to export around 164,000 bpd of Bonny Light in February, 8.5 percent of total Nigerian shipments of 1.94 million bpd.

The Nembe pipeline sends crude produced by Shell’s venture and other companies to the Bonny export terminal. As a result of the leak, Shell declared force majeure on Bonny Light crude exports in early January.

Shell said on Friday the force majeure — a legal clause allowing a company to miss deliveries due to circumstances outside its control — remained in place.

An oil trader said he expected the force majeure to be lifted soon given that production has been recovering.