Vanguard (Lagos)

22 November 2012

Nigeria: Oil Leak - Exxonmobil Shuts in Production

Lagos — After almost two weeks of battling oil leak at its Ibeno facility offshore Akwa Ibom State, the Nigerian unit US-based Oil giant, ExxonMobil, is forced to shut down production.

Refraining from disclosing how much production was affected in spite of prodding, the oil company in a statement, yesterday, "declared force majeure due to the difficulty in meeting projected liftings because of repair work on a section of pipeline affected in a November 9 oil release incident."

Force majeure is a legal term that absorbs companies from meeting supply schedule on account of circumstances beyond its control.

As yet, the cause of the leak remains unknown as ExxonMobil has not said anything regarding its preliminary investigations into the spill.

A statement by General Manager, Public & Government Affairs, Mr. Paul Arinze, said: "We are working to minimize down-time period and have notified appropriate regulatory agencies and purchasers. We regret any inconveniences this may cause our customers,"

Breaking the news of the oil leak, ExxonMobil said the source of the leak was identified and the pipeline was isolated and shutdown, while also deploying emergency response personnel and equipment as well as notifying relevant regulatory authorities.

The authorities, including the Department of Petroleum Resources, DPR; National Oil Spill Detection and Response Agency, NOSDRA; and the Akwa Ibom State Ministry of Environment, were said to have been notified of the spill of approximately 200 barrels of oil.

It is not clear whether ExxonMobil is unable to contain the spread of the spill to other locations, thereby forcing it to shut down production.

But an update on the spill by the company on Tuesday, indicated that the joint team, comprising the company and the regulators, is still struggling "to determine coastal shorelines that might have been affected," according to MPN Managing Director, Mr. Mark Ward.

Nearly 500 local personnel were said to have been involved in the cleanup work along the coastline, where daily aerial flights were helping to monitor and support the cleanup activity. "Dispersants approved by the Department of Petroleum Resources (DPR) had earlier been used to disperse the oil offshore," the statement added.

Spill spreads 20 miles

However, reports estimated that the spill had spread at least 20 miles from its source, coating waters used by fishermen in a film of sludge.

A Reuters' reporter visiting several parts of Akwa Ibom state saw a rainbow-tinted oil slick stretching for 20 miles from a pipeline that Exxon had shut down because of a leak a week ago. Locals scooped it into jerry cans.

"This is the worst spill in this community since Exxon started its operations in the area," said Edet Asuquo, 40, a fisherman in the Mkpanak community, as women scooped oil into buckets. In some marshy areas, plants were poking out of the slick, not yet dead and blackened by the oil.

"The fishermen cannot fish any longer and have no alternative means of survival," Asuquo said.

The U.S. major's outage comes on top of multiple production problems in Africa's biggest crude exporter, after fellow oil majors Shell and Eni reported disruptions at onshore sites due to oil theft and Nigeria's worst flooding in 50 years.

Oil slick

One fisherman described noticing a large quantity of oil on the surface of the sea and all over the beach the Friday before last, adding that the company has since sprayed chemicals in the water, which was helping to disperse it.

It was the second major oil spill near Exxon facilities in three months. At the end of August, an oil spill left a slick running for miles along the coast.

Oil spills are common in Nigeria, where enforcement of environmental regulations is lax and armed gangs frequently damage pipelines to steal crude. Oil majors say thieves are responsible for most of the spills on shore.

A U.N. report in August last year criticized the government and multinational oil firms for 50 years of oil pollution that has devastated the Ogoniland region.

"Our prayers are for tough punishment on the oil companies operating the Niger Delta," said Inyang Ekong, the secretary of the fishermen's association, as the car he was in swept past oil washing up onto beaches in an area called Ibeno.

Oil major BP Plc this week agreed to pay $4.5 billion in penalties for spilling nearly 5 million barrels of oil into the Gulf of Mexico. Despite thousands of barrels a year spilt by oil majors in Nigeria, none has ever been forced to make a financially significant settlement.

Some communities are now attempting to sue for compensation from Shell in Western courts.

A raft of production outages has caused export delays to Nigerian crude to lengthen, as the country's number one export suffers acutely, oil traders say.

Shell still has a force majeure in place on Forcados and Bonny Light crude oil grades after a tanker being used to steal oil caught fire on September 30, spreading a blaze across several oil and gas installations.

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