Shell Declares Force Majeure In Nigeria

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Royal Dutch Shell, Europe's largest oil company, declared force majeure on its June and July output of Nigerian Bonny Light crude due to pipeline fires and leaks at the hands of attacks by militant rebels in the country's oil-rich Niger Delta region, an issue Shell has had to contend with multiple times over the past year.

Shell said internal investigations showed the ''incidents were caused by hacksaw cuts which indicate third party interference and activities of unknown persons,'' according to the AFP. Shell's force majeure declaration went into effect today. Leaks and five separate fire incidents on the pipeline occured in four villages in Ogoniland last Thursday and the fires were put out two days later, AFP reported.

Shell (RDS-A), the Western oil major with the largest Nigerian footprint, has been forced to halt operations in Ogoniland in the past due to issues with local rebels. Last year, the Anglo-Dutch oil giant said it would be looking to sell some assets in Nigeria following multiple rebel attacks on its various assets in the country.

Nigeria, an OPEC member, vies with fellow cartel member Angola for the top spot among Africa's oil producing nations. Light sweet crude, prized for its ease in refining, is primarily what Nigeria produces, making it a lucrative, but risky market for companies such as Shell, which has done business there since the 1950s.

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