Shell may give up Nigerian oil pipeline because of thefts, sabotage

November 04, 2013 | Company Operations, Pipelines

Shell_petrol_station (460 x 300)Abuja, Nigeria (UPI) – The Nigerian subsidiary of Royal Dutch Shell said it’s considering giving up its stake in a 60-mile oil pipeline in the Niger Delta region of southern Nigeria because of thefts and sabotage.

The Shell Petroleum Development Company (SPDC)  said it may sell its claim to the Nembe Creek Trunkline, the Nigerian newspaper ThisDay reported Monday. The decision, the newspaper reported, comes three years after the company spent $1.1 billion on pipeline overhauls.

The trunkline and the region’s Trans-Niger oil pipeline are used for the delivery of an estimated 400,000 barrels of crude oil per day from oil fields in the Niger Delta.

In July, the Nigeria Extractive Industries Transparency Initiative estimated Nigeria lost $10.9 billion in oil revenue to theft and sabotage from 2009-11.

The government has blamed instability in the Niger Delta for its failure to meet a 2013 production target of 2.53 million barrels of oil per day.

Royal Dutch Shell has repeatedly said it was unable to fulfil its contractual obligations in Nigeria because of issues involving militants who, in some cases, drill holes into pipelines, causing environmental damage.

The company resumed shipping oil from the Niger Delta in October after a brief closure because of pipeline problems.