Nigeria: Forcados oil terminal still closed

WARRI, Nigeria (AP) — Shell Nigeria's Forcados oil export terminal remains closed seven weeks after it was shut down to repair a sabotaged undersea pipeline, a spokesman said Thursday, amid growing concerns about the industrial levels of oil theft in the world's 13th largest oil producer.

Shell will not say how much oil is not being exported, though Forcados is one of the country's biggest terminals with capacity to export 400,000 barrels a day — more than one fifth of Nigeria's estimated daily production of 2.2 million barrels.

The government estimates oil thefts averaged 300,000 barrels a day in 2013 and, along with losses during repairs, cost the country $12 billion last year, Austin Igbuku, manager of Shell's Ogoni Restoration Project, told Delta state government and community leaders two weeks ago.

Shell said it closed the Forcados terminal in Delta state on March 4 to repair a leak caused by a "crude theft point" on a pipeline eight meters (26 feet) below sea level. It is believed to be the first report of oil equipment sabotaged out at sea.

"Such an underwater operation does not come easy to us in the industry, but some criminals were able to install a theft point without detection. Investigations are ongoing to understand how this was done," Igbuku told stakeholders.

A statement purporting to come from the Movement for the Emancipation of the Niger Delta said they sabotaged the pipeline on March 1 and that scuba divers around March 27 caused "further damage to the ongoing repair works." Shell refused to confirm the additional sabotage.

The militants had been largely inactive since a 2009 amnesty in which the government paid off thousands of saboteurs, some of whom now are paid to guard the very installations they targeted. The militants say they want a more equitable share of oil revenues for residents who have been impoverished by the loss of fishing creeks and agricultural land ruined by oil industry pollution.

Shell spokesman Precious Okolobo said Thursday the "force majeure" declared March 25 remains in effect. It gives the company some legal protection against contractual obligations because of events beyond its control.

Shell manager Igbuku said thefts have risen to unprecedented levels — greater than at the height of militancy in the Niger Delta when the U.N. estimated about 150,000 barrels a day of crude was being stolen in 2009.

"The combination of crude oil theft, illegal refining and pipeline vandalism have become a major threat to the Nigerian economy," he told stakeholders. "Massive oil spills also result from these activities, forcing the operators to frequently shut in production to repair the sources of leaks, take out theft points, clean up spills and restore the environment."

The biggest loser is the Nigerian government, which is the largest shareholder in Shell Nigeria and which relies on oil for about 95 percent of its revenues, he said.

He said the oil industry estimates four-fifths of the stolen crude is going to local and international crime syndicates who take the crude to large, ocean-going tankers waiting offshore, which export oil to refineries outside the country. "Some of these tankers reportedly meet mid-ocean to transfer and blend their stolen cargo, aiming to obliterate the origin of the crude oil," Igbuku said.

Analysts say the large-scale thefts would be impossible without collusion from some of the military deployed to protect against sabotage. They say high-level politicians and military officers take a share of the proceeds.

President Goodluck Jonathan last month announced a $1 billion initiative to try to halt the thefts, which he said would need international cooperation.

Currently, security forces have focused on destroying dozens of small, makeshift refineries on shore, many Igbuku said appear to be run by some of the tens of thousands of unemployed young people in the Delta.


Faul reported from Lagos, Nigeria.