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Shell Reports Big Jump in Nigeria Spills


MAY 4, 2010


LONDON—Royal Dutch Shell PLC reported Tuesday big increases in the volume of oil spilled in the Niger Delta in 2008 and 2009, due in large part to damage to pipelines from sabotage and attempts at oil theft.

The figures show how serious an impact armed militants in the Niger Delta have on Shell’s operations in the region and how important it is that the Nigerian government’s push for a truce is successful.

In 2009, 13,900 metric tons of oil were spilled into the Niger Delta as a direct result of sabotage or theft, more than double the 2008 total and four times the 2007 figure, Shell said in its annual sustainability report. Shell also quadrupled its estimate of the amount of oil it spilled in the region due to accidents in 2008 to 8,800 tons following the completion of investigations.

“One of these investigations involved an incident at Iriama in Delta State in November 2008, in which around 6,000 tons were spilled” after a pipeline that was undergoing repairs exploded, Shell said.

Operational spills in 2009 totaled 1,300 tons, the lowest amount ever for the company, Shell said. Its Nigerian joint venture, the Shell Petroleum Development Company, or SPDC, recovered around two-thirds of the oil spilled in Nigeria in 2009.

“We undoubtedly had a difficult year in Nigeria in 2009,” said Shell’s Chief Executive Peter Voser in the report. “The Niger Delta remains a very challenging place in which to operate. Security issues and sabotage are constant threats to our people, assets and the environment.

“But we are cautiously optimistic that conditions there are improving and that our initiatives to help community development and build on our partnerships with the government will produce good results,” Mr. Voser said.

SPDC’s total oil-and-gas production in Nigeria remains “significantly lower” than its level in 2005, before the latest bout of militant attacks in the Delta region started. SPDC is a joint venture between Shell, Italy’s Eni SpA, France’s Total SA and the Nigerian National Petroleum Corp.

Shell is facing lawsuits in the Netherlands from several Nigerians claiming damage to their livelihoods following spills from SPDC-operated infrastructure.

Shell burned off 2.5 million tons of hydrocarbons in 2009, the vast bulk of which came from gas flaring in the Niger Delta. This was down 18% from the previous year, largely due to lower production resulting from the poor security situation, Shell said. Around 7.5 million tons of the greenhouse gas carbon dioxide was emitted by this flaring, Shell said.

Separately, Mr. Voser said Tuesday that the massive oil spill in the Gulf of Mexico represents a pivotal moment for the entire oil industry, but it is too early to say whether it will have any impact on future U.S. policy.

Shell is one of the largest oil and gas producers in the gulf area, where crude is spilling out of a deepwater well after the sinking of Transocean Ltd.’s Deepwater Horizon rig, which was drilling an exploration well for BP PLC.

BP has requested help from other oil companies to cope with the massive oil spill, which is rapidly approaching the Louisiana coastline, saying the response to the spill and its aftermath must be industry-wide.

The oil spill “is an industry event that needs a technical solution,” Mr. Voser told reporters in Singapore.

Industry investors have expressed concern that the spill may lead the U.S. administration to reverse its earlier proposal to expand offshore drilling. Shell announced in late April that it had added 350 million barrels of oil equivalent to its oil and gas reserves in the Gulf of Mexico from discoveries in 2009 and 2010.

Write to James Herron at


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