Nigeria Loses $1.6 Billion to Crude Oil Theft Annually - Shell

Shell Petroleum Development Company has expressed concern over the activities of crude oil thieves and illegal refineries operators in the Niger Delta, saying that the country was losing $1.6bn annually to oil theft.

The company cited its forced shut down of the Nembe Creek Trunklines, NCTL, in Bayelsa State, a facility which produces about 150,000 barrels of crude oil per day and its declaration of force majeure on Bonny Light export.

This, according to the company, was to enable it remove crude oil theft connections, investigate suspected oil theft leaks and effect repairs.

Speaking at a workshop organised for media practitioners in Yenagoa, Shell Manager, Government/Community Relations, Evans Krukrubo, said over 90 per cent of its pipelines in the region had been ruptured by suspected oil thieves. He noted that the shutdown of NCTL production would impact negatively on Bayelsa's share from the Federation Account.

Nembe Creek Pipeline Leak: Shell begin Joint Investigation

Shell Petroleum Development Company (SPDC) has embarked on Joint Investigation Visit (JIV) to ascertain the cause of the leakage on its crude oil flow-line in Nembe Creek, Bayelsa State. The joint inspection involved representatives of the company; communities; local and state governments and the regulatory agencies.

Shell had shut in a flow-line from Well-39s that flows to Nembe Creek-2 Flow Station, after a leak was observed on the line. Crude oil from Nembe flow station goes to the 380,000 barrels per day capacity Bonny Export Terminal in Rivers State, which is scheduled to export about 150,000barrels per day this month.

The Amnesty Programme introduced for repentant militants in the Niger Delta has drastically reduced destructive attacks on oil workers and infrastructure but oil bunkering has been on increase.

 Shell recently repaired the Nembe Creek Trunkline (NCTL) after shutting it down because of incessant crude theft that led to a declaration of force majeure on export of Bonny Light.  The damaged facility was commissioned in 2010 at the cost of $1.1 billion to replace an older pipeline. NCTL was also shut down for one month in December 2011, following a spill caused by two failed bunkering connections.

Oil leak under control - Shell Nigeria

Shell said today it had contained oil leaked from a failed pump within a flowstation on Nembe Creek though local residents disputed this, saying it had spread to mangrove swamps. Shell said it had shut down the oil processing facility over a pump failure, but denied reports that a significant amount of oil had spilled in the area.

The flowstation in the Nembe Creek area of Bayelsa state has been closed. Shell said that “some oil escaped from the seal into the saver pit in the flowstation, with some sheen observed (in the area. The pump has been repaired.” Nigerian NGO Environmental Rights Action sent a team to visit the site and reported that there was a spill. The head of the group, Nnimmo Bassey, described the spill as extensive.

Oil spills from equipment failures or loading accidents are common in the swampy Niger Delta region of Africa's top energy producer.

The Anglo-Dutch oil major says locals sometimes exaggerate the impact in the hope of boosting their compensation claims.  The government and oil firms have pledged to clean up the region and other parts of the Delta, but residents say they have seen very little action.  Armed gangs also tamper with pipelines to steal crude and Shell's Nembe Creek trunk line has been subject to numerous spills in recent years, many due to sabotage.

A landmark UN report in August last year slammed the government and multinational oil companies, particularly Shell, for 50 years of oil pollution that has devastated the Ogoniland region of the Niger Delta. The government and oil firms have pledged to clean up the region and other parts of the Delta, but residents say they have seen very little action.