Shell Details Niger Delta Oil Spill

Company Says Theft at Pipeline Caused Largest Accident This Year at Its Joint Venture

LONDON—Royal Dutch Shell RDSB.LN +0.02% PLC said Friday that a fire in June caused by oil theft on a major pipeline in the Niger Delta resulted in the largest oil spill from facilities operated by its Nigerian joint venture this year.
The incident is the latest example of the environmental and economic impact from oil spills in the region. It comes despite promises from the Nigerian government to take aggressive action to clamp down on theft, which Shell said earlier this year has reached "unprecedented levels."
Shell says that the vast majority of environmental damage in the Niger Delta results from spills caused by thieves who breach pipelines in order to steal oil.
However, human rights groups and nongovernmental organizations operating in the region have accused Shell of being too quick to blame oil theft for spills that could have been caused by other factors, such as operational error or aging infrastructure.
Almost two-thirds of the oil released from the pipeline during the incident burned up at the site, Shell said.
The June 19 incident on the 150,000 barrel-a-day Trans Niger Pipeline released nearly 2,700 barrels of oil, equivalent to just over a third of all the oil the Shell joint venture has reported spilled from its facilities since January, Shell said in a report published on its website.
The high incidence of theft from pipelines has started to dent Nigerian government revenues because it frequently forces the shutdown of large volumes of oil production. In a statement published in April, the state oil company Nigeria National Petroleum Corporation said oil thefts kept oil output below expected levels in the first three months of the year, costing the country $1.23 billion in lost revenue.
The fire and spill on the Trans Niger Pipeline highlights the difficulty companies face in tackling the problem. Oil thieves tapped into the pipeline at night, even as the Shell Petroleum Development Co., or SPDC, had worked during the day to repair damage done by more thieves a few weeks earlier, Shell said. SPDC is a joint venture between Shell, state-owned Nigeria National Petroleum Corp. and the local units of France's Total SA FP.FR -1.44% and Italy's Eni ENI.MI -2.48% SpA.
In an effort to help reduce oil spills, SPDC announced in June it was planning to spend $1.5 billion to build a new pipeline that will bypass a section of the Trans Niger Pipeline that has been particularly badly affected by theft.
The new loop off the main pipeline will instead pass through a swampier area where more of the pipe will be submerged, making it a harder target, Shell said. The new pipeline will also be protected by stronger intruder-detection technology.
Last week, Amnesty International and the Nigerian National Coalition on Gas Flaring and Oil Spills—a coalition of NGOs—called for an independent inquiry of the June 19 fire on the Trans Niger Pipeline to determine who was responsible for the spill.
A Shell spokesman said the appropriate Nigerian authorities are already investigating the matter. The company said NACGOND was present during the joint investigation conducted into the fire and spill, which concluded that the incident was caused by oil theft.

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