leaky line

Shell is selling one of the most pilfered oil pipelines in the world

August 27, 2014
Obsession
Energy Shocks
August 27, 2014

Shell is selling about $5 billion of oil assets in Nigeria, and among the properties is one of the most frequently robbed oil pipelines in the world.

That would be the 60-mile Nembe Creek Trunk Line, which, when it is not leaking like a sieve or shut down, can carry 150,000 barrels of oil a day to Bonny on the Nigerian coast for export on tankers. Shell is selling Nembe along with four onshore oilfields as it and other major oil companies continue to divest from Nigeria, according to the Financial Times

Nembe often leaks heavily, and the reason is a local practice called “bunkering,” in which organized criminal groups puncture holes in pipelines and cart off the resulting flow of oil for sale, locally and abroad.

Shell has said it loses a whopping 60,000 barrels of oil a day to the thieves.

In 2012, Shell said it fixed 157 breaks in Nembe, still leaving 90 to be repaired. In March 2013, the company declared force majeure on Bonny Light exports after unprecedented thefts from Nembe by “a well-financed and highly organized criminal enterprise” using “influence, corruption and violence to protect its interests.”

And how is this enterprise unloading all this oil? Some believe that tens of thousands of barrels of it are being laundered by transshipment through Ghana.

Shell’s other pipeline from the eastern Niger Delta is under attack as well. The Trans Niger Pipeline, a 36-mile, 150,000-barrel-a-day line, was shut down last year after an explosion caused by bunkering.

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