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Shell Nigeria 'may shut down oil pipeline'

05 March 2013, 07:32

Abuja - Royal Dutch Shell may be forced to shut down "completely" its 150 000 barrel per day Nembe Creek oil pipeline in Nigeria due to persistent thefts, the company's local unit said on Monday.

The Nembe trunkline is one of the most important production routes for Africa's top crude oil exporter, feeding the benchmark Bonny Light export terminal. The pipeline was replaced in 2010 at a cost of $1.1bn, Shell says.

But criminal gangs tap into exposed pipelines in the winding creeks and waterways in the Niger Delta. Some of the crude is refined locally but the majority is transferred onto larger ships offshore and sold internationally.

Oil theft also has a devastating environmental impact, destroying fishing communities and poisoning water used for drinking and bathing in parts the Niger Delta.

Flowstations on the pipeline were shut down three times between February 22 and February 25 due to thefts, with each incident deferring 150 000 bpd of production, Shell said in a statement.

"This is really getting to the crunch I must say," Shell Nigeria's managing director Mutiu Sunmonu said in a statement.

"It is getting to the crunch that rather than allow people to continue to attack my pipeline and devastate the environment, I may actually consider shutting in the pipeline completely.

"...The situation in the last few weeks is unprecedented. The volume being stolen is the highest in the last three years; over 60 000 bpd from Shell alone," he said

Nigerian Oil Minister Diezani Alison-Madueke said last month that the thefts were the work of international crime syndicates and she has requested help from Britain to tackle the problem.

Security experts say they believe Nigerian officials must be complicit in the business considering the scale of theft, which some oil companies have estimated at around 150 000 bpd across the whole of the industry.

- Reuters

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