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Shell Oil Pipeline Set On Fire

This Day (Lagos)
NEWS
October 13, 2004
Posted to the web October 13, 2004

By Mike Oduniyi And Donald Andoor
Lagos/Port Harcourt
20,000 Bpd of Crude Lost
Crude oil production in the country suffered a set back yesterday, after some
unknown persons allegedly set fire on a pipeline that feeds Shell's Bonny
Export Terminal in Rivers State.
The fire which gutted the 28-inch Trans Niger Pipeline that runs through
Moghor, in Gokana Local Government Area of the state, resulted in a production
cutback of about 20,000 barrels per day (bpd).
It was not immediately clear yesterday if the incident was connected with the
on-going strike called by organised labour to protest the increase in fuel
prices.
Shell Petroleum Develop-ment Company (SPDC), however, said in a statement
signed by its External Relations Director, Mr. Precious Omuku, that youths in
the area had earlier denied a response team from the company access to the
affected pipeline when they wanted to effect repairs when an oil leak was
noticed on it.
"While access was being negotiated, some unknown persons set the leak point on
fire," stated Shell.
"The team also observed that the leak had spread to a nearby fishpond. Efforts
are being made to put out the fire and clamp the leak," it added.
There was no reported casualty recorded in the incident. The fire was still
raging, while a fire fighting crew from SPDC drafted to combat it was beaten
back by the inferno.
A joint investigation team from Shell, government representatives and the
regulatory authorities have been constituted to determine the cause of the
incident and the volume of the oil leak.
The company, however, added that plan to switch the crude supply to the Bonny
Oil Export Terminal through a 24-inch pipeline, "will involve a production
cutback of about 20,000 bpd."
"The production drop will be for a few days, because the 28" line will be fixed
soon," Omuku said.
The latest production shut-in has taken Shell's total crude losses in the
Rivers area to 48,000 bpd, following an earlier shut down of a flow station
producing 28,000 bpd, over fears of attack by militants operating in the area.
In monetary terms, the NNPC/Shell joint venture may be losing about $2.4
million (N319.2 million) to the production shut in.
Fears of possible disruption to Nigeria's oil production since the NLC-led
strike commenced three days ago, had been driving oil prices up in the
international market.
Prices hit another high yesterday, with the Light sweet crude traded at $54.45
a barrel at the New York Mercantile Exchange while the Brent broke through to
$51 per barrel.
However, oil production and exports from Nigeria, the world's seventh biggest
producer at some 2.5 million bpd, was yet to be affected by the strike.
Multinational oil companies accounting for more than 90 percent of Nigeria's
output said yesterday that operations are still running as normal at the fields
and terminal, although skeletal services are being maintained at the offices.
Rising crude prices have been cited as reasons for the incessant upward review
in pump prices of petroleum products in the country, which depends largely on
importation to meet domestic fuel needs.

   

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