Nigeria’s oil production has dropped by at least 95,000 barrels per day as the Royal Dutch Shell said on Wednesday it had closed the Nembe Creek Trunk oil pipeline to stop leakage caused by oil theft.
The oil major said that it shut the pipeline on Sunday night.
The pipeline pumps the Bonny Light grade of crude oil and the Bonny Light export shipping lists for April showed that 95,000 barrels per day would be pumped through the NCTL.
As such, at least 95,000bpd of oil must have been shut in due to the closure of the pipeline.
When contacted, the spokesman for Shell Petroleum Development Company, a Nigerian subsidiary for the Anglo-Dutch firm, Mr. Precious Okolobo, said, “We closed the NCTL on Sunday for the removal of crude theft points. We plan to complete the exercise and reopen the line as soon as possible.”
The NCTL was originally constructed to collect crude from 14 oil pumping stations across the Nembe Creek, Krakama, Awoba, Ekulama and San Bartholomew oil fields, and transport it to the Cawthorne Channel field and SPDC’s Bonny Export Terminal for dehydration and export.
The oil major invested $1.1bn in 2010 to replace the Nembe Creek pipeline, but the key oil transport channel has been repeatedly hit by sabotage and theft since 2011, forcing Shell to repeatedly shut it.
SPDC had last year announced plans to sell off the 97-kilometre, 150,000bpd of oil NCTL in the Niger Delta and experts said this might not be unconnected with the activities of oil thieves on the pipeline.
Oil theft has been estimated to cost Nigeria some $6bn per year.
SPDC had last year shut down the NCTL for repairs after it was breached by thieves and it said the temporary closure cost an estimated 150,000bpd in lost output.
As such, Royal Dutch Shell said it lost $250m in the second quarter of 2013 due to oil theft and other operational challenges in Nigeria.
Eni also blamed oil theft in the country for the loss of 55 per cent revenue in the second quarter of 2013.
The International Energy Agency also said Nigeria was losing about $7bn annually to oil theft.
“Oil bunkering, or theft, costs the government an estimated $7bn in lost revenue per year,” the agency said.
The IEA last month blamed Nigerian oil theft for damage to pipeline infrastructure as well as cutting OPEC’s output volumes.
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