Shell shuts 25,000 bpd oil pipeline in Nigeria due to theft damage

ABUJA (Reuters) - Shell shut its Imo River oil pipeline in Nigeria on October 31 due to damage caused by thieves and deferred 25,000 barrels per day (bpd) of production, the company's local unit said on Sunday.

This latest outage will add to a growing list of production problems for Africa's biggest oil exporter.

Nigeria's worst flooding in 50 years contributed to Shell and Eni declaring force majeure on major crude oil grades in recent weeks. This means they cannot keep to contract agreements due to problems out of the company's control.

U.S. oil major Exxon said on Saturday it had shut a pipeline off the coast of Nigeria's Akwa Ibom state after an oil leak but it didn't say what the cause of the spill was or how much output was affected.

"(Shell) shut down the Imo River Trunkline in its eastern operations after it found several crude theft points on the facility," an emailed statement from Shell's Nigerian arm said.

"Some six crude theft points have so far been confirmed on the 12-inch trunkline, of which three have been repaired."

Shell said two crude oil theft valves had also been attached to its Trans-Niger Pipeline on Sunday but these had been closed off and the pipeline was being reopened.

Oil spills are common in Nigeria's onshore Niger Delta due to widespread theft by oil gangs tapping into pipelines and the poor maintenance of some ageing infrastructure.

Crude theft is a growing problem in Nigeria and oil companies estimate around 150,000 bpd is stolen. Some of it is made into fuel locally in makeshift refineries, hundreds of which are hidden in dense mangroves of the Delta.

But much gets transported into international markets as part of criminal networks, oil industry sources say.

Oil spills have a devastating environmental impact, destroying fishing communities and leaving large parts of the Niger Delta's winding waterways layered in a shiny black film.

Shell said there had been 26 spills in the Imo River area so far this year alone, spilling 3,000 barrels of oil.

(Reporting by Joe Brock; Editing by Susan Fenton and Elaine Hardcastle)

Source: http://news.yahoo.com/shell-shuts-25-000-bpd-oil-pipeline-nigeria-161321199--finance.html

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