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BP Is Not The Only Spill Master—Check Shell In Nigeria

THE WALL STREET JOURNAL

JUNE 16, 2010

By Benoit Faucon

BP’s technical mishaps in the deep waters of the Gulf Mexico have transfixed global opinion and inspired embarrassment for both a U.S. president and a British Prime minister. Yet, in the remote wetlands of Nigeria’s Niger Delta, far from the eyes of the Western public, equipment failure can also cause severe heartburn.

The fire and smoke plume from the Trans-Niger pipeline in the Niger Delta, April 2009.

In April last year, a leak on the Trans-Niger pipeline caused a huge column of fire, forcing the operator, a subsidiary of Royal Dutch Shell, to shut down at least 150,000 barrels a day of production.

At the time, Shell said it didn’t know the cause of the fire, as we reported.

Now, one year later, it has been forced to come clean after an internal document surfaced. The giant fire was due to “rusty, damaged and [leaking] pipes,” according to a report by the contractor in charge of the facility.

“After 15 minutes of vehement smoky [oil] spills suddenly burst into flames” and it took eleven hours to put out the fire, he wrote.

With the report now out, Shell has finally acknowledged, in an official email to Dow Jones Newswires, that the accident was due to “an unfortunate result of equipment failure.” Even more surprising, it admits “oil recovery and initial cleanup of affected sites were only completed last month.”

The company insists that almost 98% of the spills volume at its Nigeria facilities is due to sabotage and theft. But one can wonder if this measure reflects the real impact of its operational issues.

For one, the technical fault led to the shutdown of at least 10% of Nigeria’s production for over two weeks. At $50 a barrel at the time, that means the unit lost at least $135 million simply because a rusty, leaky pipe was left unrepaired.

And though much of the oil may have burnt instead of flowing, the impact of the fumes cannot be overlooked. Burning crude generates emissions that in turn induce respiratory diseases in humans and acid rains which are damaging for agriculture.

Shell’s report—conducted jointly with the authorities–says the oil spread into neighboring crops. Unlike in the Gulf of Mexico, incidents in Nigeria start right in peoples’ backyard.

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