Shell Nigeria declares force majeure on oil exports

October 11, 2013 | Company Operations, Terminals & Storage

Shell operated Bonny Island  oil terminal in Nigeria

Shell operated Bonny Island oil terminal in Nigeria

Lagos (AP) — Shell Nigeria declared “force majeure” Friday on exports of Bonny Light Crude oil, blaming oil thefts that have forced the closure of its major Trans-Niger Pipeline at least five times in three months.

The announcement of “superior force” was effective from noon Thursday, after Shell reported three new leaks on the pipeline. One was caused by multiple holes drilled into the pipeline, it said.

The declaration gives Nigeria’s biggest oil producer some legal protection against contractual obligations.

Shell said it has repaired 189 crude theft points this year on the Trans-Niger Pipeline and the Nembe Creek Trunkline that carry a daily total of 300,000 barrels of crude — at least 15 percent of the production of Africa’s biggest oil producer.

A statement from managing director Mutiu Sunmonu called the increasing thefts a “dangerous development” that requires more concerted efforts by all parties including the government and communities in the restive Niger Delta.

Experts estimate Nigeria loses about 200,000 barrels a day to theft with most stolen by international criminal gangs that sell it on world markets. They say some Nigerian politicians and military leaders benefit from the massive thefts in a country where corruption is endemic.

Smaller amounts of oil are stolen by members of communities impoverished by decades of oil spills that have destroyed the livelihoods of farmers and fishermen by polluting farmlands, creeks and mangroves.

Human rights groups say the company sometimes blames theft to avoid paying damages to local communities and to avert criticism about corrosion on the 48-year-old Trans-Niger Pipeline.