Monday, June 13, 2011

Shell declares force majeure on Nigeria Bonny oil

LAGOS (Reuters) - Royal Dutch Shell declared force majeure on Monday on its Nigerian Bonny Light crude oil loadings for June and July due to production cutbacks caused by leaks and fires on its Trans-Niger Pipeline (TNP).

Shell's Nigerian SPDC unit said the leaks -- caused by saboteurs who used hacksaws -- had been repaired and production resumed on June 12, but the shutdown of the lines had affected loading programmes at its Bonny export terminal.

Bonny is one of Nigeria's top oil streams and is popular with refiners in Europe and the United States. Previous disruptions to Bonny supplies have boosted world oil prices.

The force majeure, which frees the company from contractual deliveries due to actions beyond its control, took effect at noon (1100 GMT) on Monday and Shell said it would advise customers of a new schedule.

"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," said Babs Omotowa, vice president for health and safety for Shell in sub-Saharan Africa.

"At end April, we recorded more than 35 sabotage spills. SPDC is continuing to upgrade facilities ... 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."

Crude oil theft, known as bunkering, is rampant in the Niger Delta with some estimates putting the amount stolen as high as 100,000 barrels per day (bpd) at its peak, much of it smuggled inside otherwise legitimate shipments.

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