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Shell says no progress fixing Nigeria oil pipeline


Shell says no progress fixing Nigeria oil pipeline

Fri Aug 15, 2008 8:48am EDT

LONDON, Aug 15 (Reuters) – Repairs to a damaged oil pipeline in Nigeria have been struggling to make significant progress, Royal Dutch Shell (RDSa.L: QuoteProfile,ResearchStock Buzz) said on Friday.

Shell’s Nembe Creek trunkline, located at Kula in Rivers state in the restive Niger Delta, was sabotaged in late-July.

The Anglo-Dutch oil major declared force majeure on Bonny Light crude exports to free itself from meeting its contractual obligations through to September.

“Repair work is not progressing as much as we want due to some security concerns. No real progress,” a Shell spokesman said.

The Movement for the Emancipation of the Niger Delta (MEND), which has led a campaign of violence against the oil sector since early 2006, claimed responsibility for two pipeline attacks in July, including the Nembe Creek line.

Both pipelines are operated by Shell and are connected to the Bonny export terminal. Shell only confirmed the damage to the Nembe Creek line.

The spokesman said Bonny Light production has been unchanged at a low level but declined to specify the actual output volume.

Earlier, Shell said about 40,000 barrels per day of its equity production had been shut by the attacks. State run Nigerian National Petroleum Corp. (NNPC) said the total outage volume of Bonny Light was 175,000 bpd.

Bonny Light’s normal production level is about 400,000 bpd, which should make it the largest stream from Nigeria.

Shell reiterated that the pipeline repair work has not been completed. Nigerian Oil Minister Odein Ajumogobia said earlier in August that all the pipelines damaged from the late-July attacks were fixed and some production had restarted.

Shell is the worst hit by militant sabotage in Nigeria. Repeated attacks to oil facilities have halted about a fifth of oil supplies from the world’s eighth largest oil exporter, contributing to a rise in oil prices above $100 this year.

(Reporting by Ikuko Kao; editing by James Jukwey)



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