Shell Petroleum Development Company has suffered a major economic and production setback after the sabotage of one of its main pipeline conduits that run through Nigeria’s oil-rich swamps and mangrove forests.
Shell declared force majeure on its supply agreements, which frees the oil giant from all contractual obligations to its customers due to unforeseen circumstances. According to a company report, Shell will fail to meet forecast supply contracts in which the company is responsible to provide 300,000 barrels per day of Bonny Light crude. The production setback is expected to carry through June and July.
Tony Okonedo, head of Shell’s media relations in Lagos, Nigeria said an investigation found that the damage to the Trans Niger pipeline was caused by hacksaw cuts.
Nigeria is a top supplier of crude to the U.S.