The Shell Petroleum Development Company of Nigeria Limited (SPDC) has fallen back on the force majeure clause in its contract on Bonny Light loadings for June and July 2011. The force majeure regime came into effect at noon yesterday.
The declaration, according to the firm, is as a result of the production cutbacks caused by leaks and fires which occurred last week on the Trans Niger Pipeline (TNP).
Force majeure, a French legal term which means ‘superior force’, is a common clause in contracts that basically frees one or both parties from liability or obligation in the event of extraordinary circumstances which are usually beyond the control of both parties such as war, strike, riots, or natural disasters such as flooding, earthquake and so on.
“Joint Investigation Visits comprising government agencies, communities and SPDC found that the incidents were caused by hacksaw cuts which indicate third party interference and activities of unknown persons,” Shell said in a statement issued yesterday.
“The leaks have been repaired leading to resumption of production on June 12. The TNP which transports production from SPDC and third parties in its Eastern operations to Bonny Terminal, was affected by leaks and five separate fire incidents on both the 24” and 28” lines in Bodo, Bera, Biera and Mogho all in Ogoniland, on June 9. SPDC immediately shut the lines, mobilised its pipelines response and fire fighting teams and extinguished the fires by June 11”.
According to Shell, the production deferment over the period has affected the loading programme at the Bonny Terminal; it would now have to advise customers of a revised schedule.
Babs Omotowa, Vice President HSE, Infrastructure & Logistics, Shell Sub-Saharan Africa, said the leaks and fires show a worrying trend not only on the TNP but also on the firm’s facilities elsewhere.
“Sadly, the trend is continuing unabated. At the end of April, we recorded more than 35 sabotage spills,” Mr Omotowa said. “SPDC is continuing to upgrade facilities, replace pipelines and improve oil spill response systems. But no matter how much we improve our performance, until the activities of oil thieves and illegal refiners are brought to an end, the vast majority of oil spills in the Niger Delta will continue.”
Nigeria has suffered much crude oil theft, also known as bunkering, which remains widespread and out of control in the Niger Delta region of the nation. Efforts to destroy illegal oil refineries spotted among the creeks of the Niger Delta has proven to be almost as dangerous for the soldiers working there as for the oil thieves, who sometimes turn the stolen crude oil into homemade petrol.
About two years ago, the federal government introduced an amnesty programme for gunmen in the region, a move which industry watchers thought would bring the nation respite.
It is feared that bunkering, an activity which has been a part of life for years in Nigeria and has cost the nation fortunes, may still be around for years to come.
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