13 September 2008
Lagos — Royal Dutch Shell said yesterday that it has extended its force majeure on Nigerian Bonny Light crude oil exports.
The action, which frees the company from contractual obligations, was extended owing to security concerns in the oil-rich Niger Delta region after the Anglo-Dutch oil major found more leaks on a Bonny Light crude pipeline, a Shell spokesman said.
"We have found more leaks on the pipeline. So repair works became more complicated than we had thought. This is also because of the security situation," the spokesman said.
Shell did not give a specific date for ending the force majeure, first declared after the sabotage to the Nembe Creek pipeline in July and was initially meant to remain in effect till the end of September.
The escalation of violence by militant rebels in the Niger Delta this year has repeatedly crippled oil supplies from Nigeria, which exports about 2 million barrels of oil daily.
The loss of high quality crude from the world's eighth largest oil exporter helped push oil prices to record highs above $147 a barrel in July. Shell, the operator of Bonny Light, is the worst hit by the rebel attacks.
October loading programmes show Bonny Light exports will average about 197,000 bpd for the month, about half the grade's normal production, prompting oil traders to expect an extension of the force majeure after September.
Bonny Light production should be about 400,000 bpd without any problems. But Shell's export programmes have shown that output has not recovered to that level this year.
Shell's Nigerian operations have suffered a lot of setbacks owing to series of attacks on its facilities by Niger Delta militants.
Only in June, Nigeria's biggest offshore facility, Shell's Bonga field, was shut down for over a weeks following an attack by militants.
Offshore facilities were hitherto thought to be safe from militant attacks.
Located 120 kilometres (75 miles) offshore, Bonga oil field has a daily production capacity of 225,000 barrels of oil and 150 million standard cubic feet of gas.
As at June, the Managing Director of SPDC, Mr. Mutiu Sunmonu, said the company had as much as 400,000 barrels of crude oil shut in as a result of militant attacks on its facilities.
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We should try to see to the problem affecting those people of niger delta,and do something to solve all this attack only in a diplomatic way.Is like you drilling oil in holland and the people there are suffering.just like norway did not join Eu because of thier rich oil they have.Please don,t get me wrong but the people of niger delta deserve rest and should be treated like every other human being.