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NIGERIA MAY LOSE 150,000BPD CRUDE OIL AS SHELL DECLARES FORCE MAJEURE

By NBF News
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Shell Petroleum Development Company said yesterday that it would not be able to meet its contractual agreements for the supply of crude oil from Nigeria for sales in the international market for June and July. The Anglo-Dutch oil company blamed the development on fire outbreak in one of its key infrastructure which had forced the oil firm to shut down operations to fix the fault.

Shell, in a statement yesterday declared a force majeure on the loading of its Bonny Light crude oil for June and July, 2011. The company said the declaration was as a result of crude oil production cutbacks caused by leaks and fires which occurred last week on the Trans Niger Pipeline (TNP).

Daily Sun learnt that the pipeline conveys about 150,000 barrels of crude oil from other Shell and third party facilities within the location of the pipeline. Industry sources, however, allayed fears of any strong consequences the shortfall may have on the Nigerian economy as the figure could easily be made up for by other oil companies. In the last two years, the TNP had been subjected to attacks by pirates and suspected militants, who tried to steal crude from the facility, forcing Shell to shut down the facility for repairs.

The latest attacks Shell said were caused by thieves, who tried to vandalise the pipe to steal crude oil.

'A joint investigation visit comprising government agencies, communities and Shell found that the incidents were caused by hacksaw cuts which indicate third party interference and activities of unknown persons,' the company said in the statement.

The TNP which transports production from SPDC and third parties in its Eastern operations to Bonny Terminal, was affected by leaks and five fire outbreaks on both the 24' and 28' lines in Bodo, Bera, Biera and Mogho all in Ogoni land, on June 9. SPDC immediately shut the lines, mobilized its pipelines response and fire fighting teams and extinguished the fires by June 11. The leaks had been repaired leading to resumption of production on June 12.

Production deferment over the period had affected the loading programme at Bonny Terminal, and SPDC will now have to advise customers of a revised schedule. The force majeure came into effect at noon yesterday.

Vice President HSE, Infrastructure & Logistics, Shell Sub-Saharan Africa, Babs Omotowa said: 'The leaks and fires show a worrying trend not only on the TNP but also on our facilities elsewhere. Sadly, the trend is continuing unabated. At the of end April, we recorded more than 35 sabotage spills. SPDC is continuing to upgrade facilities, replace pipelines and improve oil spill response systems. But no matter how much we improve our performance, until the activities of oil thieves and illegal refiners are brought to an end, the vast majority of oil spills in the Niger Delta will continue.'