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Vandals Disrupt Shell Pipeline in Nigeria


February 1, 2010


LAGOS, Nigeria—Vandals over the weekend punctured an oil pipeline operated by Royal Dutch Shell PLC, say Nigerian military and security officials, highlighting how an illicit oil-theft industry in the creeks of the Niger Delta continues unchecked.

The breach that occurred Saturday was originally reported to have been the work of militants bucking a five-month cease-fire with the government. But the pipeline damage was caused by “vandalism and not an explosive attack,” said a western oil executive responsible for security and knowledgeable about the situation.

It was unclear how much production was affected. On Sunday, Shell said that the breach had shut down three flow stations after “a leak was observed on the Trans Ramos Pipeline.”

A Shell representative declined to comment on lost production or the cost effect of the shut downs.

Known as illegal bunkering, the theft of crude oil has boomed over the past few years. The stolen oil can be sold to local refiners that cook the crude down into diesel and kerosene for the domestic market, or it can be shipped to international ports for sale.

Those who illegally puncture the pipelines range from technically sophisticated operators—many of whom were once trained by western oil companies—to locals using simple tools to siphon off crude or liquefied gas. The motive is the same: profit.

Illegal “bunkerers” can make as much as $8 million to $20 million a day, depending on their take, according to Emmanuel Egbogah, the special adviser to the president of Nigeria on Petroleum Matters. The government is close to awarding a contract to a company to “fingerprint” stolen Nigerian crude oil and track vessels carrying the oil to foreign ports, he said. Several foreign companies have been shortlisted, but Mr. Egbogah wouldn’t identify which ones.

Industry experts estimate that 50,000 to 300,000 barrels of oil are illegally bunkered every day.

Nigeria’s militants, on the other hand, have often bombed pipelines in a bid to scare away foreign investors and deprive the government of a major source of investment and revenue.

Saturday’s sabotage “was just a normal bunkering incident,” said General Mohammed Bello, a military commander operating in the Niger Delta. “Lots of fuel containers and drums were abandoned there, the environmental damage was extensive. This bunkering is a daily affair. Every day we are going out and closing bunkering operations. It’s a normal thing in Nigeria.”

On Saturday, the main militant group in the Niger Delta, the Movement for the Emancipation of the Niger Delta, called off their cease-fire, pledging an “all-out onslaught against [oil companies’] installations and personnel.” Under the five-month-old peace deal, the government extended amnesty from arrest in return for the militants laying down their weapons.

The looming threats on Nigeria’s oil infrastructure come as the country grapples with the prolonged absence of President Umaru Yar’Adua. For more than two months, the Nigerian president has been receiving medical treatment for a heart condition in Saudi Arabia, which has delayed several oil-related deals and investments projects.

The country’s National Assembly has held a series of closed-door meetings on the president’s absence and several lawsuits have been brought to court in an effort to force the president’s supporters to reveal his health status.


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