Shell: Sabotage on Nigerian Pipeline Affects Oil Contracts

Posted June 13th, 2011 at 1:15 pm (UTC-5)
Leave a comment

Oil giant Royal Dutch Shell says it will not fulfill some of its contracts because of acts of sabotage on a major pipeline in Nigeria.

The company said investigators found that its Trans Niger pipeline had hacksaw cuts, suggesting it was damaged by thieves seeking to siphon the oil.

Shell says that because of multiple leaks on the pipeline, its Nigerian subsidiary declared a “force majeure” on Monday. The move allows Shell to suspend its contractual obligations because of forces beyond its control.

The declaration involves June and July shipments of Bonny Light crude from the oil-rich Niger Delta.

In May 2010, Shell halted production of Bonny Light crude for two months following a fire on the Trans Niger pipeline. The company said the fire was caused by thieves.

Oil facilities in the region are often sabotaged by organized gangs who steal oil.

The area's oil industry is also targeted by militants who say they want the region's oil wealth to be shared with its impoverished residents.