Thursday, August 25, 2011

Nigeria: Oil Exports Crash As Shell Shuts-in Production in Bayelsa

Adeola Yusuf

Lagos — Oil production and exportation from the shores of Nigeria on Tuesday fell as Royal Dutch Shell shut-in production from its Adibawa delivery line in Bayelsa state.

The biggest oil company, in terms of production, swiftly declared Force Majeure on Bonny light exports for the remainder of August, September and October.

Force majeure is a legal term releasing a company from contractual obligations due to circumstances beyond their control. Bonny Light is a type of crude consume majorly in the United States (U.S) and China.

The company stated this through its subsidiary in Nigeria, Shell Petroleum Development Company (SPDC).

This action, the SPDC said, was a result of production deferment from several pipeline incidents in its eastern operations.

A statement signed by Tony Okonedo noted that in one instance, SDPC recorded six separate oil spill incidents on the Okordia-Rumuekpe trunk line at Ikarama in Bayelsa state, between August 2 and 15 this year.

"All (incidents) from hacksaw cuts by unknown persons," the company said.

On August 21, according to Okonedo, another three hacksaw cuts were reported on the nearby Adibawa delivery line.

"Some production is shut-in while SPDC repairs the line.

Oil giant Shell on Tuesday warned it may not meet contractual obligations on certain exports from Nigeria after sabotage caused damage to two pipelines in the country's main oil-producing region.

Shell's Nigerian joint venture "has declared force majeure on Bonny Light exports for the remainder of August as well as September and October," the company said in a statement.

Nigeria is Africa's largest oil producer and the continent's most populous nation.

Pipeline damage and associated spills are common in the Niger Delta region as a result of oil theft to feed the lucrative black market.

Militants claiming to be fighting for a fairer distribution of oil revenue have also regularly blown up pipelines, though such attacks have decreased since a 2009 amnesty deal.

Shell has said that more than 75 percent of all oil spills and more than 70 percent of oil spilled from its Nigerian joint venture facilities in the Niger Delta from 2006-2010 were caused by sabotage and crude theft.

Activists say oil firms such as Shell have not done enough to prevent such incidents.

A UN report earlier this month said decades of oil pollution in the Ogoniland area of the Niger Delta, located in neighbouring Rivers state, may require the world's largest ever cleanup.

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