NIGERIA PIPELINE EXPLOSION: NO INJURIES, SMALL

C O N F I D E N T I A L SECTION 01 OF 02 LAGOS 002109

SIPDIS

STATE FOR AF/W
STATE FOR EB/ESC/IEC/ENR/BLEVINE
STATE FOR DS/IP/AF
STATE FOR INR/AA
STATE PASS DOE FOR DAS JBRODMAN AND CGAY
STATE PASS TREASURY FOR ASEVERENS AND SRENANDER
STATE PASS DOC PHUEPER
STATE PASS TRANSPORTATION MARAD
STATE PASS EX-IM, OPIC AND TDA

E.O. 12958: DECL: 10/14/2014
TAGS: EPET EINV PGOV ASEC NI
SUBJECT: NIGERIA PIPELINE EXPLOSION: NO INJURIES, SMALL
PRODUCTION LOSS FROM PIPELINE EXPLOSION

Classified By: Consul General Brian Browne for Reasons 1.5 (B & D)

Summary
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1. (SBU) On 10 October, a leaking Shell crude oil export
pipeline which had been vandalized caught fire in the River
State. There were no injuries reported. Shell confirms
illegal bunkering as the cause of the leak. Shell will cut
production by 20,000 barrels a day for a few days while the
pipeline is being repaired. The community advocacy group
Movement for the Survival of the Ogoni People (MOSOP) has
publicly complained about Shell's handling of the leak.
MOSOP also claims their representatives and journalists
investigating the incident were arrested by the State
Security Service.

Bunkering Causes Shell Pipeline Fire; No Injuries
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2. (SBU) On 10 October, a Shell crude oil export pipeline
linked to Bonny Export Terminal caught fire. The Shell
External Relations Director confirmed that bunkering caused
the pipeline leak. A hacksaw was used to cut the pipe, which
then leaked oil into a nearby pond; someone set the leak
point aflame, causing an explosion in the pond. Shell had no
reports of any injuries from the incident. Press reported
that local youths initially prevented Shell from access to
the site; the External Relations Director confirmed Shell has
since been able to access the site. In addition to reports
of profits gained by bunkering, miscreants often caused fires
to create a pretext for environmental and other damage claims
against the company, he remarked.

Shell Confirms Small Production Loss; Clean-Up Not Started
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3. (SBU) Shell engineers are currently attempting to stop
the leak. They are assessing the scope of the clean-up
operation, but have not yet begun to clean the spill.
Repairs to the pipeline will take a few days. During that
period, oil will be diverted to a narrower pipeline, and
production cut by 20,000 barrels a day. (Note: Shell
produces just over half of Nigeria's 2.3-2.4 million
barrels/day, so the loss represents less than 1 percent of
Shell's daily output. End note.)

MOSOP Notes Env. Damage, "Inadequate" Shell Response
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4. (SBU) The community advocacy group, Movement for the
Survival of the Ogoni People (MOSOP),has publicly complained
about Shell's handling of the leak. Press reports stated
that MOSOP President Mr. Ledum Mitee, alleged "up till now
(Tuesday) containment measures had not been taken." He said
that oil from the leak had reached a tidal creek and was
threatening a large stretch of farmland. Mitee denied that
youths prevented Shell from gaining access to the site. A
MOSOP representative told us the spillage started on Sunday
in at least two points. Presently, the pipeline has been
capped and the fire put out. The MOSOP representative stated
that the clean up process has not begun, as Shell brought
"grossly inadequate" equipment to the site. He said the
communities remained calm during the spillage and fire, and
never stopped Shell from attending to the situation. MOSOP
is also investigating the cause of the spill.

MOSOP: SSS Manhandled Journalists
--------------


5. (SBU) The MOSOP representative also stated that on 12
October, while he and two MOSOP colleagues were at the site,
they were detained by State Security Service (SSS) for 5
hours. The MOSOP officials said that they were not harmed,
but that three journalists who were also arrested had their
cameras seized and were "severely manhandled".
Shell: "Willing to Talk" to Pressure Groups
--------------

6. (SBU) The Shell External Relations Director indicted
that Shell regards MOSOP as one of a variety of "pressure
groups." He indicated Shell's willingness to talk to such
community groups, but that the company does not view
discussions with them as a substitute for discussions with
competent local and state government authorities. He also
stated that Shell would be responding to what the company
regarded as inaccurate statements by MOSOP in the press.


7. (C) Comment: The leak and fire come at a very
inopportune moment. The recent violence around Port Harcourt
and the nationwide labor strike have tensions high and have
generated skittishness in the international market. The time
of the incident might be coincidental. However, it could
also be an attempt by one of the militia groups to gain
leverage and take action in talks with the Government by
reminding Abuja that they have the capacity to realize their
threats against production.

BROWNE