Shell raises alarm over oil theft

FEBRUARY 6, 2012

LAGOS (AFP) – Shell raised the alarm on Monday over repeated damage to a key pipeline in southern Nigeria by what it said were thieves seeking to siphon off crude for sale on the lucrative black market.

The Anglo-Dutch oil giant said the Nembe Creek Trunkline had been hit by an increased number of attacks by thieves “barely 16 months after the old line was replaced due to repeated sabotage attacks.”

While highly organised crude theft — locally called “bunkering” — has long been a major problem in Nigeria, Africa’s largest oil producer, authorities have warned that the practice has been on the rise.

It involves thieves tapping pipelines to siphon off oil either to be sold as crude or to be treated at makeshift refineries. The oil is often directed toward waiting vessels.

“On the 24th of December last year, the line was shut down because of leaks caused by two failed bunkering points, and since repairs were completed, more than 50 theft valves have been discovered,” a Shell statement said.

“In one case, some 17 illegal bunkering points were found within a distance of 3.8 kilometres.”

Mutiu Sunmonu, head of Shell’s Nigerian joint venture SPDC, said in the statement that “the level of crude theft at NCTL can no longer be tolerated.”

“It is difficult to sustain production in the circumstance as we have to shut down when a facility trips and fix the cause before restarting,” he said. “This happened three times just between the 26th and 30th of January.”

Shell resumed production on the line January 23 after repairs due to the December incident, which led it to declare “force majeure,” a legal term indicating it may not meet contractual obligations due to events beyond its control.

The line’s current daily output is 140,000 barrels per day, Shell said.

Shell says the vast majority of oil spills in recent years in the oil-producing Niger Delta region, badly hit by years of pollution, have been caused by sabotage, theft and illegal refining.

However, activists say Shell has not done enough to prevent such spills, and a UN report issued last year took Shell’s Nigerian joint venture to task over oil pollution.

The report said Shell’s procedures for control and maintenance of infrastructure had not been followed and spills had also not been sufficiently cleaned.

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