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Shell shuts oil pipeline six days after reopening, production drops by 150,000 barrels

By on July 12, 2013

Six days after it reopened the Trans Niger Pipeline, which was shut down following a fire incident in June, Shell Petroleum Development Company of Nigeria Limited has again shut the pipeline due to a leak.

As a result, 150,000 barrels per day of oil has been deferred with grave implication for the Federal Government, which will face reduced oil revenue for as long as the pipeline remains shut.

Announcing that oil production in the country had again dropped by 150,000bpd, SPDC also confirmed in a statement on Thursday that a leak on the Trans Niger Pipeline at the Bomu-Bony section in Owokiri.

The oil major, however, said it was not sure of the cause of the leak as well as the amount of crude already spilled.

It further reiterated that the TNP had been a target of theft in recent times.

The statement said, “SPDC operated Joint Venture today (Wednesday) shut in the 24-inch Trans Niger Pipeline as a result of a confirmed leak on this line at the Bomu-Bonny section at Owokiri.

“With the 28-inch TNP already shut in for removal of illegal oil theft connections, a total of about 150,000 barrels per day of oil has been deferred.

“Details of this latest incident, including cause and size of spill, are unclear at the moment, but the TNP has been variously targeted by crude oil thieves in recent months and shut down several times to enable the removal of theft points.”

SPDC said the relevant authorities had been notified of the incident, adding that it was mobilising to respond as quickly as possible with a joint investigation visit and repairs, preparatory to clean up.

SPDC had on June 20 shut the Trans Niger Pipeline following an explosion and fire at a crude theft point on the 28-inch section of the facility at Bodo West in Ogoniland.

The Managing Director, SPDC, and Country Chair, Shell Companies in Nigeria, Mr. Mutiu Sunmonu, while commenting on the development, had said, “This is another sad reminder of the tragic consequences of crude oil theft. Unknown persons continued to reconnect illegal bunkering hoses at Bodo West even as our pipeline team was removing crude theft points.”

However, SPDC last Friday reopened the pipeline, which it said was shut down in a precautionary response to the fire.

Few days after, the pipeline has again been fractured; a development that shows that oil theft is a persistent problem in Nigeria.

But SPDC said the cause was not clear as at the time this report was filed, but explained that a joint investigation visit would follow to determine what happened.

Oil production in the country had on April 18, 2013 dropped by 150,000bpd when the Nigerian National Petroleum Corporation/SPDC Joint Venture declared a force majeure on Bonny Crude due to incessant oil theft.

The Acting Group General Manager, Public Affairs Division, NNPC, Ms. Tumini Green, consequently confirmed a significant drop in crude oil production for the first quarter of 2013.

She said the Federal Government lost about N191bn ($1.23bn) to oil theft and vandalism in the first quarter of the year.

Green said daily crude oil production fluctuated between 2.1 million and 2.3 million barrels per day during the first quarter of the year, compared with the projected estimate of 2.48mbpd.

She said, “Expectedly, this fall between actual production and forecast in first quarter of 2013 has resulted in a drop in crude oil revenue of about $1.23bn (N191bn) that should have accrued to the Federation Account.

“Investigations showed that 53 break points were discovered along the 97-kilometre Nembe Creek Trunkline. Repair work is expected to last about six weeks.

“This will further reduce our April and May monthly average to about 2.2 million bpd and further decrease crude oil revenue by about $554m (equivalent to N83bn) that should have accrued to the Federation Account.”