UPDATE 3-Shell declares force majeure on Nigerian Bonny oil

Wed Aug 18, 2010 12:26pm EDT

Related Topics

* Shell says force majeure effective from Aug. 16

* Trade sources say output cut by up to 100,000 bpd

* Force majeure on Soku gas plant remains

(Adds update on Soku gas plant in last para)

By Nick Tattersall and Joe Brock

LAGOS/LONDON, Aug 18 (Reuters) - Royal Dutch Shell (RDSa.L) declared force majeure on its Nigerian Bonny Light oil stream after a rise in sabotage on its pipelines cut output by up to 100,000 barrels per day, trade sources said on Wednesday.

A Shell spokesman in Nigeria said the force majeure, which frees the Anglo-Dutch firm from contractual deliveries to customers due to actions beyond its control, took effect from Aug. 16. He gave no comment on any production impact.

Bonny Light is a light crude popular with U.S. and European refiners and has been Nigeria's largest oil stream, but the onshore production facilities are particularly vulnerable.

Two oil trading sources said Bonny Light output had been reduced by as much as 100,000 bpd by recent sabotage.

Shell warned on Sunday of a rise in acts of sabotage on its crude oil pipelines in Nigeria's southern Niger Delta in recent weeks. [ID:nLDE67E0C2]

Shell's Nigerian SPDC joint venture said it had recorded three incidents this month of suspected thieves drilling holes or using hacksaws to pierce pipelines in the Cawthorne Channel leading to its Bonny export terminal and siphon off oil.

The company said it was working to repair the Cawthorne Channel pipeline and had set up containment booms to prevent oil seeping further into the Niger Delta, a vast network of mangrove creeks, which make up one of the world's largest wetlands.

The force majeure on gas deliveries from Shell's Soku gas feed plant to the Nigeria LNG (NLNG) plant at Bonny remains in place, a company spokesman said on Wednesday. Soku's pipelines were damaged by thieves in 2008 and leaked again last year. [ID:nLDE5BH0D8] [ID:nLJ623295]

(Additional reporting by Daniel Fineren, editing by Alison Birrane)

FILED UNDER: