Shell and Mobil Producing Nigeria Unlimited (MPN) - operators of the Nigerian National Petroleum Corporation (NNPC/MPN), have shut down pipelines due to damages caused by suspected oil thieves.
The crude oil production shortfall sequel to Shell’s shutdown was estimated at 25,000 barrels per day. The estimate from MPN could however not be ascertained as at yesterday.
MPN said it shut down pipeline offshore in Akwa Ibom State after an oil leak started on Saturday.
Shell’s Nigerian arm “has shut down the Imo River Trunkline in its eastern operations after it found several crude theft points on the facility. Production of some 25,000 barrels of oil per day is deferred,” a statement said.
The line was originally isolated on October 31 when the first set of leaking points was discovered, it said, adding that unknown persons installed more crude theft connections days later, bringing the total to six.
The Anglo-Dutch company said that there had been 26 spills in the Imo River area of southern Nigeria this year, 25 of which have been due to sabotage, causing the spill of about 3,000 barrels into the environment.
“Ground visits showed that the oil had impacted rivers and other water bodies even as we have managed to deploy containment booms and are now starting to recover spilled crude,” Shell’s Vice-President, Tony Attah said.
In a statement signed by the General Manager, Public Affairs of Exxon Mobil, Paul Arinze, the company said that the source of the leak has been identified, adding that the pipeline was isolated and shutdown.
According to the company, emergency response personnel and equipment have been deployed to the affected pipeline.
He noted: “Regulatory and community representatives have been notified. MPN also arranged for representatives of Department of Petroleum Resources (DPR), National Oil Spill Detection and Response Agency (NOSDRA), Akwa Ibom State Ministry of Environment and local community to overfly the area. We regret this incident has occurred and are committed to maintaining high safety, health and environmental standards in our operations. An investigation into the cause of the release is ongoing”.
Meanwhile, The Shell Petroleum Development Company of Nigeria Limited (SPDC), a subsidiary of Royal Dutch Shell Plc (Shell), has embarked on divestment spree of its stakes in oil field in the Niger Delta.
The company, at the weekend, completed the sale of its 30 per cent interest in Oil Mining Lease 30 (OML 30) in the Niger Delta to Shoreline Natural Resources Limited (Shoreline) for $567 million.
In September, Shell also completed the sale of its 30 per cent interest in OML-34 in the Niger Delta to ND Western Limited for $400 million.
Also, 30 per cent interest in OML 40 in the Niger Delta was also recently conceded to Elcrest Exploration and Production Nigeria Limited
A media statement from Shell’s International media relations, United Kingdom on Saturday, stated that the divestment was part of the re-shaping of SPDC’s onshore portfolio and was in line with the Federal Government of Nigeria’s aim of developing Nigerian companies in the country’s upstream oil and gas business.
According to the release, Shell has been in Nigeria for more than 50 years and remains committed to keeping a long-term presence there – both onshore and offshore. “Through SPDC and its other Nigerian companies, Shell responsibly produces the oil and gas needed to fuel the economic and industrial growth that generates wealth for the nation and jobs for Nigerians”, it added.
The statement explained that OML30 covers an area of some 1097 square kilometres and includes the Kokori, Afiesere, Oweh, Olomore, Eriemu, Evwreni, Oroni and Isioka fields and related facilities.
“ The divested infrastructure includes most of the Trans Forcados major crude oil pipeline from OML30 to the Forcados River manifold. The remaining eight km to the Forcados terminal will remain with the SPDC joint venture. The divested fields produced around 35,000 barrels per day of oil and condensate (100 per cent).
Total E&P Nigeria Limited (10 per cent ) and Nigerian Agip Oil Company Limited (five per cent) have also assigned their interests in the lease, ultimately giving Shoreline a 45 per cent interest”.
It noted that all approvals have been received from the relevant authorities of the Federal Government of Nigeria.
Shoreline is a joint venture between Shorline Power, a leading private Nigerian energy and infrastructure company and Heritage Oil Plc, an independent upstream exploration and production company listed on both the London and Toronto stock exchanges.
The Standard Bank Group and JP Morgan provided instrumental support in financing the acquisition price of OML 30. Standard Bank will further provide the permanent long term financing for the Company.
Reacting to the signing of the agreement recently, the Chief Executive Officer of Shoreline, Mr. Kola Karim, said that the completion of the deal was a major development for the company.
“Taking us into the upstream oil and gas sector at such a significant time when the Nigerian government is promoting active participation from indigenous companies. Shoreline, along with Heritage’s strong technical team and upstream experience will become one of the leading indigenous oil producing companies in Nigeria. This will strengthen our existing network of relationships with the local communities, local government & authorities in the oil producing areas of Nigeria.
“Shoreline will inaugurate capacity developments and training programmes ensuring we add value and develop close relationships with local communities and other stakeholders in the delta region.” Karim stated.