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Shell issues Nigeria warning in production
Royal Dutch Shell PLC cannot meet forecast production on oil coming from Nigeria’s restive southern delta after an increase of sabotage on its pipelines, a company spokesman said Wednesday.
Spokesman Tony Okonedo told The Associated Press that the company’s
Nigerian subsidiary declared “force majeure” on its Bonny Light crude
shipments. The term is used when it is impossible for an oil company to
cover the promised supply from the field.
Okonedo blamed recent sabotage on pipelines near Bonny in Rivers state
for the production warning. Shell said Sunday that the lines bore signs
of drilled holes and hacksaw cuts, suggesting that thieves likely had
tapped into the lines to siphon off crude oil to sell on the black
market.
The subsidiary did not give an estimate of how much crude oil it had
lost in the incidents, though it acknowledged the damaged pipelines had
leaked crude oil into the environment. The company said it put
containment booms into the surrounding waterways to stop the oil flow
and hired a contractor to begin a cleanup.
Bonny Light crude, easily refined into gasoline, drives Shell’s oil
production in Nigeria _ long one of the oil giant’s most profitable
regions. Shell, which discovered oil in Nigeria 50 years ago in the
southern Niger Delta, remains the dominant oil major in the West African
nation.
Shell blamed nearly all of its oil spills last year on sabotage from
thieves and militants. However, environmentalists and community
activists routinely criticize Shell, blaming the company’s aging
pipelines and indifferent corporate culture for the frequent oil spills.
Upset by the spills and the region’s unceasing poverty, militants in the
delta have targeted pipelines, kidnapped petroleum company workers and
fought government troops since 2006. That violence drastically subsided
after a government-sponsored amnesty deal last year, which provided cash
payoffs for fighters and the promise of job training. However, many
ex-fighters now complain that the government has failed to fulfill its
promises.
Nigeria, a member of OPEC, is one of the top crude oil suppliers to the U.S.
Source: Associated Press
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