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A Worrying Sign For U.S. Shale

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Zainab Calcuttawala

Zainab Calcuttawala

Zainab Calcuttawala is an American journalist based in Morocco. She completed her undergraduate coursework at the University of Texas at Austin (Hook’em) and reports on…

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Shell Fears Reopening Twice-Bombed Nigerian Pipeline

Pipe

Royal Dutch Shell fears that reopening a pipeline in Nigeria will cause local separatist groups to re-bomb the facility for a third time, according to reports emerging from the area.

The Trans Forcados Pipeline, which takes 400,000 barrels to the Forcados export terminal every day, has been out-of-operation for all but three weeks in the past year, according to risk analysis published by SBM intelligence on Friday.

Previously, militants dove underwater to install bombs near the section of the pipeline in the Atlantic Ocean that they aimed to destroy. Shell brought in underwater engineers to repair the pipeline in an act of defiance against the militants and their most sophisticated attack to date.

Forty-eight hours after the engineers completed seven months of repairs, creating a loss of $3 billion, the group bombed the Trans Forcados again.

"Nigeria wants Royal Dutch Shell to reopen a major export pipeline in the Niger Delta but the oil major wants better protection first, to avoid having it blown up yet again," the SBM Intelligence report said, quoting industry sources and other anonymous speakers.

Nigeria has roughly 500,000 bpd offline because of security issues, Manji Cheto, senior vice president for West Africa at Teneo Intelligence, told Bloomberg last month.

Related: Tensions Rise In Iraq As Kurdish Forces Seize Oil Pipeline

In February, Nigerian Oil Minister Ibe Kachikwu announced between $50 billion and $100 billion in lost oil revenues due to the series of militant attacks on oil pipelines and related facilities in the Niger River Delta. A previous attempt at peace had led to a short truce late last year, but ultimately failed.

The Niger Delta Avengers and related groups demand that at least part of the profits the government makes from exploiting the region’s oil wealth be used for the benefit of the Nigerians living in the fuel’s original place of extraction.

Last month, Nigerian Vice President Yemi Osinbajo visited the Niger Delta in an effort to bring peace to the oil-producing region, but no reported progress was made during the trip.

By Zainab Calcuttawala for Oilprice.com

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