Shell says it's containing oil spill in Nigeria's Delta

Fri Aug 23, 2013 11:28am EDT

Related Topics

* Leak caused by corroded pipeline - military

* Shell says most spills caused by oil thefts

* Oil outages hurting Shell profits and Nigeria's economy

YENAGOA, Nigeria, Aug 23 (Reuters) - Royal Dutch Shell's Nigerian unit is containing an oil spill in the Niger Delta, the company said on Friday, after the military reported liquid "jetting" out of a pipeline.

Massive oil theft, sabotage of infrastructure and leaks from ageing pipelines are all cutting into the profits of oil majors operating in Nigeria, as well as damaging the public finances of Africa's second-largest economy.

The hundreds of spills a year in the Niger Delta have also done serious environmental damage, destroying fishing communities and poisoning water used for drinking and bathing.

The military joint task force (JTF) operating in Nigeria said it discovered a leak on a pipeline near Adamakiri in Rivers State while looking for illegal oil refiners.

"An assessment of the spot revealed that a brownish liquid substance was observed jetting out from an opening on the pipeline," a statement from the JTF said.

"The Commanding Officer ... attributed the leakage to corrosion on the pipeline."

A spokesman for Shell's Nigeria unit said on Friday that "oil spill containment" had been put in place after the leak was found but it was too early to determine the cause.

The Anglo-Dutch firm says the majority of spills are due to gangs tapping pipelines to steal oil but local communities say the company is responsible for more spills than it admits to.

Shell is facing legal action in a UK court on behalf of 11,000 members of the Niger Delta Bodo community, who say the company is responsible for spilling 500,000 barrels in 2008. Shell has admitted liability for two spills in the Bodo region but estimates the volume is far lower.

Operational problems in Nigeria cost Shell $250 million in the second quarter of this year, the firm says.

Nigeria's government revenues slumped 42 percent in July due to production outages, it said on Friday.

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