Forcados Export Pipeline

Blog Post created by aditibahuguna on Oct 9, 2016

Are militant groups responsible for the 50% reduction in Nigeria’s oil production or is Shell?

On September 29, 2016; Forbes listed out Royal Dutch Shell’s growth plan for the next five years, which now focuses on moving on to offshore production. Move forward six months to February 14, 2016, when the Niger Delta Avengers (NDA) destroyed Shell’s underwater Forcados 48-inch Export Pipline at the Forcados Export Terminal, forcing Royal Dutch Shell to shut production and announce Force Majeure. According to Nigeria Today, the production of more than 700,000 barrels per day of crude oil and 2000 megawatts of electricity was held up due to the incident. Following containment and recovery work, Shell had set May 29 as the deadline for repair proceedings to be completed in order to resume production. Shortly thereafter, another attack on the pipeline put a major stop on recovery. OPEC has since exempted Nigeria from the output cuts that are to officially be divided in November; however, the real recovery work lies in the retrieval of the 2.2 million barrels of oil per day that the militants take as their own.

The cause of this mayhem may only be truly understood by understanding the NDA, their demands and the cause that led to its creation. Their demands? ‘More power for the Niger Delta region to control their natural resources.’ The reason behind this demand?

The Niger delta houses 20 million people from 40 different ethnic groups and contains one of the highest concentrations of biodiversity in the world. From the years 1976 to 1996, an estimated 1.89 million barrels of petroleum has been spilled in the delta. Operations have led to more than 4,835 incidents. Reports suggest that half of all oil spills occur due to pipeline and tanker incidents- several of Shell’s pipelines from the region result in pollution and spillage as they are corroded. Since 1958, 9 to 13 million barrels of oil has been spilled in the delta. Effects of these incidents include degrading livelihood of Nigerian farmers, loss of mangrove forests, depletion of fish population, water hyacinth invasion, natural gas flaring etc. The NDA claims that the Niger Delta region lies robbed of development, and all essence of quality human life.

The unfairness lies in Shell’s continuous denial of its contribution to pollution, despite mass protests and their unwillingness to compensate for the damages they have caused for the better part of a century. According to Amnesty International, “The tragedy is that the oil spills continue to destroy the livelihoods of thousands of local people to this day. Shell will tell you that the vast majority are a result of theft, even though we have published evidence showing Shell misstates the cause of oil spills.” The said evidence is a report titled, 'Clean it up: Shell’s false claims about oil spill response in the Niger delta' published on their website on 3rd November 2015 implicating Shell in major cover ups, including absolute denial of their involvement in the Bomu Manifold and Boobanabe oil spills. 

The end result of this war between the Multinational Oil Corporation and the NDA is a lose-lose situation. Shell suffers heavy losses as production is crippled and Nigeria loses oil revenue and the government is forced to consider selling its hydrocarbon assets to fund their 2016 budget. The way forward is if Shell holds good on its promise to clean up the Delta, and the NDA realize blatant attacks on Shell pipelines will not provide a long term solution. As the Forcados export pipeline is to shortly resume exports after the February attacks, only time will tell whether conditions in Nigeria will change for the better or not.