A Review of the Nigerian Energy Industry

Nembe trunk line shutdown slashes Nigeria’s oil output by 140,000bpd

07 March 2013, Lagos – Nigeria’s oil output has dropped by about 140,000 barrels per day as a result of the shutdown of Shell-operated Nembe Creek trunk line in Bayelsa State.

The trunk line delivers crude oil from Shell’s producing fields to its export terminal on Bonny Island, Rivers State.

The company shutdown the facility after a leakage was detected on the pipeline.

The development has led Shell Petroleum Development Company, SPDC, which accounts for half of Nigeria’ oil production, to declare force majeure on Bonny Light export programme.

The force majeure is meant to protect the company from bearing any liabilities to crude oil buyers due to the shutdown.

Shell’s spokesman, Mr. Precious Okobolo, said, a press statement that SPDC was mobilising a team to repair the line after investigation.

“The cause will be determined by a Joint Investigation Visit, which will be scheduled once the leak point has been excavated.

“There has been a recent upsurge in crude theft activities on the NCTL, resulting in frequent production shutdowns and massive oil spills blighting the environment,” the statement added.

Okobolo also stated that between February 22 and 25, flow stations producing into the pipeline were shut down by safety systems three times due to oil theft.

Before the shut down, Shell had cautioned that crude oil theft from the Nembe trunk line could threaten daily exports of 140,000 barrels of crude oil.

The SPDC Corporate Media Relations Manager, Mr. Tony Okonedo, said in a statement in Port Harcourt that the theft was coming barely 16 months after the old trunk line was replaced due to repeated attacks.

Okonedo added that on December 24, 2012, the line was shut down because of leaks caused by two failed bunkering points. “In one case, some 17 illegal bunkering points were found within a distance of 3.8 kilometres,” he said.

SPDC Managing Director, Mr. Mutiu Sunmonu, had said the level of crude theft at the new Nembe creek trunk line had reached an alarming proportion with unbearable consequences for stakeholders.

“Some 70,000 barrels of oil per day were deferred in the December leak which took a month to repair because of the swampy terrain,” he had said.
The Shell boss said helicopter over- flights on February 6 confirmed thriving crude theft activities at various points.

The company stated in a recent report that Niger Delta unrest had turned into a worrying criminal movement, feeding on massive thefts of crude oil.

“Heavily armed and wellorganised groups attack oil and gas facilities in the region, shut down operations, kidnap staff and sabotage pipelines,” it said.

According to the report, “Rival gangs and ethnic groups have clashed violently in several of the delta’s towns. Barges take stolen oil to tankers waiting offshore for export”.

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