PORT HARCOURT, Nigeria–Royal Dutch Shell PLC’s (RDSB.LN) Nigerian joint-venture will shut down the 150,000-barrel-a-day Nembe Creek oil pipeline temporarily in April to clear illegal oil tappings, a local manager said Friday.
The shutdown, which illustrates the deepening impact of oil theft on the Nigerian industry, is Shell’s response to increasing numbers of illegal connections designed to steal oil from the pipeline, said Jurgen Janzen, a pipelines asset manager at Shell Petroleum Development Co. in a briefing with reporters in the Nigerian oil city of Port Harcourt.
“In the coming April, we will shut down the entire Nembe Creek Trunk Line to remove tapping points,” for an estimated nine days, he said. The pipeline, located in the Eastern part of the Niger Delta, normally transports 150,000 barrels of crude oil owned by SPDC., but a spokesman said it is also used by third-parties.
SPDC is a joint venture between Shell, the Nigerian National Petroleum Corp., France’s Total SA (TOT) and Italy’s Eni SpA (E).
Mr. Janzen said the Shell joint-venture is now losing 60,000 barrels a day to oil theft, an increase from 50,000 barrels a day previously. “Since the beginning of this year, it’s going up again. There are at least 90 [illegal tappings] still in the system now that we are aware of.”
The increased illegal trade has triggered fears of a new environmental disaster in the Delta. During a flyover of part of the Nembe pipeline provided by Shell for reporters Friday, a large cluster of illegal refineries processing stolen oil could be seen. Neighboring soil and waterways were dark from the oil residue produced by the makeshift facilities.
Mr Janzen said the illegal refineries are so inefficient that 70% of their oil is wasted and ends up contaminating the environment.