Shell Nigeria Production Cut By Pipeline Rupture

Royal Dutch/Shell announced it shortened its Nigerian oil production by 20,000 barrels a day due to a leak and a fire on a major pipeline. The reason of the damage is still unknown, because before Shell officials tried to investigate, a group of saboteurs set the pipeline on fire.

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.

"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."

Shell said its exports had not been affected, but the company will divert crude oil to another pipeline to enable repairs, but it requires 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.