Shell Declares Force Majeure in Nigeria

   on January 05 2012 1:29 PM
Shell workers clean up Nigeria Delta Oil Spill
A Nigerian Shell worker watches over the well head that spilled crude oil near the Niger river delta village of Oloibiri in Bayelsa state of Nigeria, June 18, 2004. The company is trying to cap another leak caused by thieves. Reuters

Royal Dutch Shell officials announced Thursday that several incidents of pipeline sabotage and oil theft prompted them to invoke force majeure on some of their Nigerian onshore crude oil operations.

Essentially meaning greater force, the move helps the Anglo-Dutch oil company insulate itself from possible liabilities following the leak in the Nembe Creek pipeline, the second in more than three weeks in the country, by declaring it beyond the company's control. 

Shell's announcement took effect at 0800 GMT (3 a.m. Eastern), and covers the company's Bonny Light crude exports.

On Wednesday, Shell officials announced crews are working to patch a break in a 56-mile pipeline that was caused by oil thieves.

A chronic occurrence in Nigeria, thieves protected by the country's dense vegetation siphon off oil flowing in the country's pipelines and refine the crude themselves for future sale. The practice is dangerous, and can lead to uncontrolled leaks in pressurized pipelines.

Shell Vice President HSE and Corporate Affairs for Sub-Saharan Africa, Tony Attah, said in a Wednesday statement to the International Business Times, the pipeline that was targeted by thieves was just several years old and meant to replace an older pipeline in the country that was repeatedly targeted by crude oil thieves.

Company crews hope to complete their repairs before then end of the month, read the statement.

But while Shell's facilities have been targeted recently, other oil companies, like Chevron and Italian oil company Agip, have been hit with theft and disruptions to their operations.  

Just last month, several Chevron employees were released after they were kidnapped by armed gunmen in the country.

According to the Council on Foreign Relations, a non-partisan independent think tank, oil pipelines in the Nigerian River Delta suffer outright attacks by militant groups. Starting in the 1990s several militant groups have been created, the most renown among them, the Movement for the Emancipation of the Niger Delta or MEND.

The groups want control over oil profits that the council says do not trickle down from Nigeria's government back to those living in the Delta.

Shell has dealt with an average of 169 oil spills a year in Nigeria the vast majority, says the company, is the result of either theft or sabotage.

An emailed request for an interview with Shell, seeking further clarification on the company's Thursday announcement was not immediately returned by press time.

Join the Discussion