Shell warns oil pipelines sabotage may cause export reduction

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Shell oil Company

Oil giant, Shell  has warned that it may not meet contractual obligations on certain exports from Nigeria after sabotage caused damage to two pipelines in the country’s main oil-producing region.

Shell’s Nigerian joint venture “has declared force majeure on Bonny Light exports for the remainder of August as well as September and October,” the company said in a statement.

Force majeure is a legal term releasing a company from contractual obligations due to circumstances beyond their control. Bonny Light is a type of crude.

Shell has reported six oil spills this month on the Okordia-Rumuekpe trunk line at Ikarama in Bayelsa state in the oil-producing Niger Delta region, “all from hacksaw cuts by unknown persons.”

“On August 21, another three hacksaw cuts were reported on the nearby Adibawa delivery line,” the Anglo-Dutch firm said. “Some production is shut in while (Shell’s joint venture) repairs the line.”

Nigeria is Africa’s largest oil producer and the continent’s most populous nation.
Pipeline damage and associated spills are common in the Niger Delta region as a result of oil theft to feed the lucrative black market.

Militants claiming to be fighting for a fairer distribution of oil revenue have also regularly blown up pipelines, though such attacks have decreased since a 2009 amnesty deal.

Shell has said that more than 75 percent of all oil spills and more than 70 percent of oil spilled from its Nigerian joint venture facilities in the Niger Delta from 2006-2010 were caused by sabotage and crude theft.

Activists say oil firms such as Shell have not done enough to prevent such incidents.
A UN report earlier this month said decades of oil pollution in the Ogoniland area of the Niger Delta, located in neighbouring Rivers state, may require the world’s largest ever cleanup.

Source: AFP