A Review of the Nigerian Energy Industry

Shell shuts-in flowstation following pipeline ‘sabotage’

Shell has shut-in a flowstation in Nigeria following damage to two pipelines. Investigations are still on after the leaks were discovered on the pipelines which feed into the Adibawa flowstation in onshore Niger Delta.

A Shell spokesperson confirmed the shut-in but said it was too early to determine the cause of the disruption although sabotage cannot be ruled out.

Local youths have claimed responsibility, citing retribution for Shell’s alleged refusal to continue paying them for surveillance work on the facility.

Reuters cited a witness as claiming that crude oil is currently gushing out of the damaged pipelines into a creek.

The Shell spokesperson could not confirm the size of the spill, if any, but said that Shell would be committed to cleaning up any resultant pollution.

News of the pipeline disruption comes as reports indicate that Shell is entering settlerment talks over two oil spills in Nigeria in 2008.

The case against Shell and its Nigerian subsidiary, Shell Petroleum Development Company (SPDC), results from two massive oil leaks in 2008 caused from a double rupture of the Bodo-Bonny Trans-Niger pipeline that pumps around 120,000 barrels of oil per day.

Lawyers representing some 69,000 Nigerians living in the Bodo community said that Shell has formally accepted responsibility for the two leaks.

A spokesperson for SPDC, Shell’s joint venture company in Nigeria, confirmed that the legal process has begun but said there was “nothing imminent” as regards a settlement. The spokesperson would also not comment on the likely cost to the Anglo-Dutch supermajor and its partners in the country as a result of any possible settlement.

Spilt oil floats in swamps of Bodo

“SPDC has always acknowledged that the two spills which affected the Bodo community, and which are the subject of this legal action, were operational,” a statement from SPDC read.

“As such, SPDC will pay compensation in accordance with Nigerian law. The legal process is continuing and could take several months to reach a conclusion.

“SPDC is committed to cleaning up all spills when they occur, no matter what the cause.

“The majority of oil spills in the Niger Delta are caused by sabotage and theft, and Bodo is particularly
affected by this criminal activity. In 2011 alone, 13 spills in the Bodo area have been caused by such illegal activity.”

Shares in Shell slumped almost 5% on Wednesday on a day when many oil and gas companies struggled on the bourse.

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