A Review of the Nigerian Energy Industry

Shell Nigeria suffers six line breaks per week

Shell 3*Lines set ablaze, oil losses mounts

Hector Igbikiowubo 13 August 2014, Sweetcrude, Lagos – The eastern operations of the Shell Petroleum Development Company of Nigeria, SPDC, suffers an average of six line breaks per week and the vandals have resorted to setting the lines ablaze, SweetcrudeReports investigations have revealed.

Indications are that the volume lost to the incidence of crude oil theft and shut-ins suffered by the company’s operations in the area now exceeds 300,000 barrels per day and continues to mount.

However, when contacted Mr Precious Okolobo, Shell Nigeria’s Corporate Media Relations Manager said crude oil theft continues to be a challenge in the Niger Delta, adding that estimates of the volumes being lost to theft vary widely.

“But the Nigerian government estimated crude oil theft and associated deferred production at over 300,000 barrels of oil per day (bopd) in 2013. On average, around 32,000 bopd were stolen from SPDC JV pipelines and other facilities, whilst the joint venture lost production of around 174,000 bopd due to shutdowns related to theft and other third-party interference,” he said.

He disclosed that in 2013, the number of spills from SPDC operations caused by theft and sabotage increased to 157, compared to 137 in 2012, whilst production losses due to crude oil theft, sabotage and related temporary shut-downs increased by around 75%.

The company admitted that there were fires on the 28-inch Trans-Niger Pipeline, TNP, at K-Dere and on July 23 at B-Dere all in Ogoniland.

“JIV (Joint Investigation Visit) established the cause of the two incidents as hacksaw cuts. There was also a leak on the 28-inch TNP at Mogho on July 28, caused by a drilled hole. The fires have been extinguished and the leaks repaired. The 28-inch TNP resumed production July 30,” the Shell spokesman volunteered.

Checks also revealed that after Shell’s broken lines are repaired and remediation conducted to restore the land, the same lines are always vandalised few weeks after, especially in the company’s eastern area operations.

Mr. Okolobo noted that as the international oil company with the most extensive footprint in the Niger Delta, SPDC has been hit hardest.

“However, all operators and ventures are affected and the biggest loser in financial terms is the Nigerian government, for which oil and gas account for 90% of export revenues and 75% of overall revenue. Shell has been campaigning actively on the issue because we see the current levels of theft as unsustainable for Nigeria and for the industry. We believe that urgent, coordinated action is required by all stakeholders in the Nigerian oil and gas industry, with the government playing a leading role,” he enthused.

Further checks revealed that the company may have sold the Nembe Creek Trunk Line, NCTL, owing to repeated and sustained acts of vandalism.

However, the company said it will not comment on the divestment programme, adding that the process was transparent.

Sale of the 97-kilometre Nembe Creek Trunkline, NCTL, comes a few years after the Anglo/Dutch multinational replaced it with a new line which gulped $1.1 billion.

The NCTL and the Trans-Niger Pipeline are the company’s major pipelines in the Eastern Niger Delta that transport some 400,000 barrels of crude oil per day from Shell’s fields as well as from third parties’ in its Eastern operations to the Bonny Export Terminal in Rivers State.

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