Shell considers shutting down Nigerian oil pipeline

Due to ongoing oil theft, Royal Dutch Shell said it may have to completely shut down the Nembe Creek pipeline in Nigeria. Shell is Nigeria's biggest oil producer, but repeated thefts in late February have caused the company to halt production of about 150,000 barrels per day.

In May 2012, Shell shut down the Nembe Creek pipeline because thieves were stealing crude oil from the 60-mile line. In December 2011, the pipeline was shut down for a month so crews could repair leaks caused by thieves.

Representatives with Shell's Nigerian subsidiary said the recent thefts have been unprecedented, with high volumes of crude being stolen.

"We have now witnessed a significant upsurge in the activities of crude oil thieves," said Mutiu Sunmonu, managing director of Shell's Nigeria division SPDC, Agence France-Presse reported. "The situation in the last few weeks is unprecedented. The volume being stolen is the highest in the last three years - over 60,000 barrels per day from Shell alone."

The thefts have also led to widespread oil spills, causing an environmental hazard, the AFP reported. Shell officials say it is clear the crude thefts are a "well-funded criminal activity" and the company would have to consider shutting down the pipeline's operations if it continued.

The $1.1 billion pipeline was built in 2010 to replace an older pipeline.

More information on the energy supply in Nigeria can be found at PennEnergy's research area.

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