Shell's decision to invoke force majeure follows the recent destruction of two of its pipelines in Cawthorne Channel, Rivers State, This Day reported Friday.

Shell spokesman Precious Okolobo warned that the company may not meet its contractual obligations on the Bonny Light crude due to the rising violence, telling journalists, "The force majeure we declared is effective from August 16. By this, it means that the company is invoking the legal clause that frees it from its obligations due to events beyond its control. The crude deferment followed attacks on and crude oil theft from our Cawthorne Channel in Eastern Niger Delta."

Shell's decision comes in the wake of three separate attacks on its pipelines in the eastern Niger Delta since the beginning of the month.

Shell is Nigeria's biggest foreign operator in the country's lucrative oil sector. Increasing attacks have meant that the company in 2009 produced an average of 629,000 barrels per day compared with 850,000 bpd in 2008.

Overall Nigeria's crude oil exports in the past three weeks have stabilized at approximately 2.5 million bpd.

The loss from Shell production is particularly notable because it is largely composed of Bonny Light "sweet crude," Nigeria's largest type of crude oil exports, which is highly sought after by foreign refiners because of its light nature and low sulfur content.

Shell Corporate Media Relations Manager Tony Okonedo said, "We are working to carry out repairs as soon as possible. The force majeure affects export of Bonny Light for the rest of August and September, following production deferment from recent crude theft activities in the Eastern Niger Delta."

Shell's latest declaration of force majeure follows Shell's recently completed repair work at the Nembe Creek Trunk-line, which subsequently restored export of 100,000 bpd from the Bonny export terminal. Following recent repairs, Shell was also able to restore output at the 400,000 bpd Forcados terminal, which had also been shut-in because of attacks by armed militants.

The recent attacks represent a blow to Nigeria's late President Umaru Musa Yar'Adua's 2009 amnesty program for repentant militants, which created a positive environment for foreign oil companies to repair damaged production facilities and increase production, resulting in steadily growing output.

The recent incidents have been investigated by Joint Investigation Teams composed of government agencies, regulators, Shell Petroleum Development Co. of Nigeria and community representatives who confirmed the disruptions as caused by sabotage.

earlier related report
Taiwan stresses claim to dispute islets over Japan, US drill
Taipei (AFP) Aug 20, 2010 - Taiwan stressed on Friday its claim to a disputed island chain, reacting to reports of a planned joint naval exercise between Japan and the United States in nearby waters.

"The Diaoyu islands are our territory and we reiterate our sovereignty claim to the islets," the foreign ministry said in a statement, adding it will keep a close eye on the drill.

Japan has territorial disputes with both China and Taiwan over the cluster of small uninhabited islets in the East China Sea, called Senkaku in Japan and Diaoyu in China.

Tokyo and Washington are planning a joint drill in the area in December, Japanese media reported Thursday.

The war games are based on a scenario involving Japan recapturing an unnamed remote southwestern island from an enemy, the Yomiuri Shimbun newspaper reported, without citing sources.

Such an exercise could bring a stern response from China, which also claims the area and has built up its fleet in recent years.

The United States and Japan, security allies since the end of World War II, usually stage their naval exercises east of Japan in the Pacific.

A diplomatic row broke out between Taiwan and Japan in 2008 when a Taiwanese fishing boat sank near the disputed islets after colliding with a Japanese patrol ship, prompting both Taipei and Beijing to press their claims on the islets.

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