Shell's Nigeria unit may be forced to shut down completely its key Nembe Creek oil pipeline in the Niger Delta following repeated attacks on the facility by thieves siphoning crude, the chairman of Shell companies in Nigeria, Mutiu Sunmonu, said Monday.
The sabotage attacks are "coming to a crunch [such] that rather than allow people to continue to attack my pipeline and devastate the environment, I may actually consider shutting in the pipeline completely," Sunmonu said in a statement.
Sunmonu said there had been an upsurge in cases of oil theft in Nigeria in the past few weeks, with Shell alone losing over 60,000 b/d to thieves.
Shell, Nigeria's biggest producer, had said earlier Monday it lost 450,000 barrels of oil output over just three days, February 22-25, due to frequent attacks on the Nembe Creek Trunkline.
"Between February 22 and 25 this year, 12 flow stations producing into the [Niger Delta] pipeline were shut down by safety systems three times due to oil thefts, with each incident resulting in deferment of 150,000 b/d of oil [production]," the statement said.
"The affected flow stations are now producing but the threat of more process upsets and unplanned shutdowns remains," it said.
Shell's Nembe Creek Trunkline is a major transport line that feeds into the Bonny oil export terminal. It was replaced in 2010 at a cost of $1.1 billion, Shell said.
Sunmonu said that the continued attacks on the company's pipelines also impacted negatively on Nigeria's economy which derives 95% of its export revenue from oil.
"Urgent action is needed against the widespread sabotage, crude oil theft and illegal refining activities to prevent further damage to the environment and the nation as a whole," he said in a statement.
Oil theft by armed gangs who hack into pipelines to steal crude and then refine or sell it abroad has become a major security headache for Africa's top oil producer.
Nigeria's Finance Minister Ngozi Okonjo-Iweala had said in 2012 that the country loses a fifth of its revenue to theft, while the International Energy Agency has said Nigeria loses $7 billion a year to oil theft.
Last month, Shell shut down its Soku gas plant in Nigeria's southern Rivers state and declared force majeure on gas supply to the Bonny LNG plant from February 5 after unknown persons drilled a hole in a Shell gas pipeline.
Shell spilled a total of 26,284 barrels of oil in the Niger Delta last year, a 75% increase from 15,000 barrels in 2011, the company said previously, blaming the rise on an increase in sabotage attacks on its pipelines and production facilities.
