From: Dulue Mbachu, Associated Press
Published October 14, 2004 12:00 AM

Shell Cuts Back on Nigerian Oil Following Pipeline Fire

LAGOS, Nigeria — Oil giant Royal Dutch/Shell said this week it was cutting back its Nigerian oil production by 20,000 barrels a day, following a leak and a fire on a major pipeline transporting crude oil to its export terminal in the Niger Delta.


It was not known what caused the leak on Monday. While Shell officials tried to investigate, a group of unidentified saboteurs set the pipeline on fire, Shell said in a statement.


A human rights activist from New Zealand said he saw the fire burning Tuesday, a day after it started.


"You have a burned out area of a kilometer long at least," said Chris Newsom, of the Britain-based Stakeholder Democracy Network. Nearby, the oil spill is spreading through creeks used for drinking water and is damaging farmland, he said.


The news came as union leaders protesting rising fuel prices in Nigeria launched a four-day strike across the country on Monday, shutting down businesses countrywide and leading to violence in some areas.


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Local residents at Moghor in the Ogoni district of the oil-rich delta on Monday prevented a Shell team from fixing the pipeline, Shell spokesman Precious Omuku said in the statement, giving no reason why.


"While access was being negotiated, some unknown persons set the leak point on fire," he said. "Efforts are being made to put out the fire and clamp the leak."


Newsom said he and two activists from Nigeria's Movement for the Survival of the Ogoni People were arrested by police while visiting the site of the spill. They were driven to the town of Port Harcourt, an hour's drive away, and questioned by Nigeria's secret police, the State Security Service, before being released five hours later.


"Technically, they wouldn't say why we were picked up," he said. "The issue was me taking photographs, clearly. That was pointed out several times."


Nigerian police spokesman Chris Olakpe said he was not aware of the arrests. Local police officials were unavailable for comment. Two other western activists were held by police for questioning earlier this year, also while visiting oil spill sites in the Niger Delta.


The pipeline transports crude oil from fields in the eastern Niger Delta to the Bonny export terminal on the Atlantic coast.


Shell produces more than 1 million barrels of oil per day in Nigeria, accounting for nearly half the country's crude exports of about 2.5 million barrels daily.


Shell said its exports had not been affected, but the company will divert crude oil to another pipeline to enable repairs, a maneuver requiring a cutback in production "of a few days" while the ruptured pipeline is fixed.


The cause of the leakage and the volume of oil lost as a result will be determined by a joint investigation now being conducted by Shell, government officials, and oil industry regulators, the company said.


Oil industry officials frequently blame pipeline ruptures on vandals and criminal gangs who siphon off the crude into buckets, barrels, and tug boats.


Gangs also sometimes sabotage company facilities in a bid to extort money from oil workers who come to clean up the mess, they say.


Nigeria is Africa's largest oil producer and the fifth-biggest supplier of oil to the United States.


The majority of the oil is drilled in the south's Niger Delta, an impoverished region of swamps and rivers where there are few schools, clinics, or modern amenities. Activists and community groups have long accused the government and oil companies of colluding to deny residents a share of oil revenues.


Source: Associated Press


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