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Shell Shuts Nembe Creek in Nigeria After Crude Oil Theft

By Elisha Bala-Gbogbo
January 03, 2012 12:25 PM EST

Royal Dutch Shell Plc (RDSA) shut oil flows of 70,000 barrels a day from the Nembe Creek Trunkline in Nigeria due to a leak caused by the theft of crude.

The pipeline, which supplies the Bonny export terminal, was halted Dec. 24. Shell is working on completing repairs before the end of the month.

“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,” Tony Attah, Shell’s vice president in charge of health, safety and environment, said today in an e-mailed statement.

Nigeria is Africa’s largest oil producer and the fifth- biggest source of U.S. imports. Shell, Exxon Mobil Corp., Chevron Corp., Total SA and Eni SpA run joint ventures with the state-owned Nigerian National Petroleum Corp. that pump about 90 percent of the country’s crude.

More than 200 barrels of crude that leaked after oil thieves installed two valves near a manifold on the pipeline have been cleared up, Shell said.

Europe’s largest oil company shut its 200,000 barrel-a-day Bonga field last month after it leaked less than 40,000 barrels in the country’s worst offshore spill in more than a decade.

Shell on Sept. 26 said it shut 25,000 barrels a day of crude from its Imo River field because of oil theft. The company on Aug. 23 declared force majeure, a legal clause that allows it to miss scheduled deliveries for circumstances beyond its control, on its Bonny Light crude exports after multiple pipeline incidents. The company shut its Adibawa pipeline on Aug. 22 after saboteurs cut crude lines, causing spills.

Attacks by armed groups targeting the oil industry cut more than 28 percent of Nigeria’s crude output from 2006 to 2009, according to data compiled by Bloomberg. Attacks subsided after thousands of militants campaigning for more local control of the delta’s energy resources accepted a government amnesty and disarmed in 2009.

To contact the reporter on this story: Elisha Bala-Gbogbo in Abuja at ebalagbogbo@bloomberg.net

To contact the editor responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net

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