Militants of the Movement for the Emancipation of the Niger Delta travelling between camps. Photograph: Veronique de Viguerie/Getty Images

June 19, 2016

Sopuruchi Onwuka

Shell Petroleum Development Company (SPDC) Limited has declared suspension of further interventions in pipeline repairs and environmental remediation in Niger Delta following relentless attacks on facilities by militants in the region.

The decision which has grim implication on government revenue, according to the company, followed second attack on the company’s Forcados export pipeline just after repairs on the first damages by militants on the offshore section of the line.

Suspension of the export pipeline means that companies that flow their crude oil production through the channel to the Forcados export terminal will continue to shut in production until safety and security issues in the area is resolved to allow normal operations.

In the mean time, the country and operating companies will have to endure the revenue downturn associated with the production downtime imposed by the pipeline outage. Gas production from the western Niger Delta may also be suspended until the pipeline is restored, implying that power production may also suffer protracted gas cuts.

Managing Director of SPDC, Mr. Osagie Okunbor, told The UNION at a media parley to launch the company’s 2015 Operations Report that the company requires government to come with a definite resolution to criminality that currently plague the industry in the region.

He pointed out that all the efforts, security measures and financial commitments invested in the repairs of the Forcados export pipeline came to no avail after the second attack by the militants. He made it clear that it would be unreasonable to continue repairs while the attacks were still ongoing.

The company’s General Manager in charge of External Affairs, Mr. Igo Weli, also said the company’s environmental remediation programme in the Niger Delta would wait until the current spate of militant attacks has been resolved to allow access and security to spill sites.

He explained that it would be counterproductive to risk clean up investments when relentless attacks still cause more spills in the region.

“You don’t mop the floor when the tap is still running,” he said.

The company which operates the country’s biggest petroleum exploration and production joint venture with the Nigerian National Petroleum Corporation (NNPC) has been facing frustration in securing and maintaining vulnerable sections of the 4000 kilometers of pipelines and flowlines in its operations.

Onshore sections of the pipeline have been the butt of sabotage by local militants locked in protracted political confrontation with government over distribution of oil wealth.

The company stated in its Operations Report for 2015 that pipeline attack and sabotage related spills dipped by 33 percent from 139 in 2014 to 93 in 2015. The company attributed to the drop to JV divestments pointing out that theft and sabotage were still responsible for 85 percent of spills from SPDC JV pipelines.

Operational spills also dropped by 58 percent in the period from 38 in 2014 to 16 in 2015 while total volumes spilled in operational incidents fell from 0.3 thousand tonnes in 2014 to 0.2 thousand tonnes in 2015. It added that 55 percent of identified spills in operated sites were remediated and certified in the year.

However, despite drops in sabotage related spills, operational spills and unaddressed spills, the JV’s production losses to theft was still as high as 25, 000 barrels per day in the year but less that the 37,000 barrels per day recorded in 2014.

“Security in the Niger Delta remains a major concern with persisting incidents of criminality, threats from militant elements, violent host community agitations and offshore piracy. Crude oil theft and related damage to oil and gas facilities in particular continue to present significant security concerns,” Shell declared.

SOURCE

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