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Shell shuts Nembe Creek trunkline in Nigeria over oil thefts

BY OBAFEMI OREDEIN

IBADAN -- Shell said that it has declared a force majeure on Bonny Light oil export following the shutdown of the Nembe Creek Trunkline in the country' s Niger Delta.

Production of some 150,000 bopd has been deferred because of the shutdown, the SPDC, said in a statement. SPDC spokesman Tony Okonedo said the trunkline was shut.

"We are concerned that the trunkline has been targeted by crude oil thieves repeatedly since we installed the new line in 2010 at a cost of $1.1 billion" said Mutiu Sunmonu, SPDC' s MD.

"The current exercise aims to remove a significant number of oil theft connections and repair any leaks on the pipeline. We recognize efforts by the security forces to contain the crime, and SPDC will work with them during the shutdown to clear illegal connections on the NTCL" he added.

The 97 km NTCL had been closed several times as a result of crude oil theft and fires between December 2011 and May 2012, SPDC said.

Nigeria will see its daily oil production of around 2.4 MMbopd go down as a result of the closure of the NTCL.

Mr. Sunmonu said "crude theft continues to affect people, the environment and the economy, and urgent action is needed by all stakeholders to tackle the problem."

The Nembe trunkline is one of the most important production routes for Nigeria' s crude oil exports, and feeds the benchmark Bonny Light export terminal in the Niger Delta.

The pipeline was shut down early last month after SPDC said it discovered a leak.

Shell had said that thieves steal an estimated 60,000 bopd from its pipelines alone in the Niger Delta and that thefts in Nigeria had reached "unprecedented levels." It added that the scale of the problem indicates "a well-financed and highly organized criminal enterprise" that uses "influence, corruption and violence to protect its interests."

Dow Jones Newswires

04/17/2013

 

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