Oil Theft in Nigeria Continues to Plague Shell
Extract from an article by Arjun Sreekumar published on 28 March 2014 by The Motlet Fool under the headline: “Oil Theft in Nigeria Continues to Plague This Company”
Though one could argue that Shell, which has been operating in Nigeria for decades, should have sold its sabotage-prone Niger Delta assets long ago, at least the company is finally taking the necessary steps to address the situation. Its decision is shaped by Shell’s new “fix or divest” strategy, which seeks to either improve or unload underperforming businesses. The move should pan out to be a good one. Not only will it reduce the company’s exposure to continuing security concerns in Nigeria, it will generate much-needed cash to meet its $15 billion divestment target.
Nigeria’s Taleveras, Aiteo bid $2.85 bln for Shell block – sources
Extracts from a Reuters article byTim Cocks and Ron Bousso published Friday 28 March 2014
ABUJA/LONDON, March 28 (Reuters) – Nigerian firms Taleveras and Aiteo have made the highest bid of $2.85 billion for the biggest of four Shell assets up for sale, but the oil major is holding out while it tries to persuade them to team up with Seplat, an existing operator.
Several oil industry sources told Reuters that, although there is little doubt the duo can raise cash for the block, Shell is concerned about the reputational risk of selling it to two exporters of crude and importers of gasoline that have no previous experience in running producing oil assets.
Tales of the Unexpected and Royal Dutch Shell Prelude FLNG
Tales of the Unexpected – 2nd in a series of articles by Bill Campbell, retired HSE Group Auditor, Shell International, about safety issues relating to the Shell Prelude FLNG project
A Prelude to disaster?
Introduction by John Donovan
On 28 December I broke the news that a whistleblower had supplied me with photographic evidence to support their concerns over the safety of the construction of Shell’s Prelude FLNG flagship vessel. The Prelude insider source alleges that packages are being installed on the vessel by totally unqualified personnel and accuses management of a failure to understand standards and regulations and claims the construction work would never pass UK standards. The source has been intimately involved in the project and is genuinely concerned that warnings issued to Shell management (and other parties) have been ignored and financial considerations are taking priority over safety issues. His warnings prompted a regular contributor, Bill Campbell, the retired HSE Group Auditor of Shell International to author articles on the subject that take into account his decades long experience and expertise. This is the second in an intended series.
Tales of the Unexpected
By Bill Campbell
When the plans to install the LPG marine terminal on the banks of the River Forth were in development much resistance to these were forthcoming from the inhabitants of the local towns and villages. Opposition came mainly from the residents of Aberdour, the nearest community to the proposed terminal. What were the implications they argued if vessels loaded with thousands of tonnes of hydrocarbon liquids got into difficulties, if the cargo spilled during collision or grounding, if the resultant vapour cloud ignited etc, it was too dangerous, not in our back yard please.
Despite these objections, and rightly so in my opinion, the development went ahead. Every agency you can think of had their input, this would be a world class operation, every precaution that could be taken would be, Esso and Shell would see to that, and so it transpired, the facilities well installed, maintained and operated have by any measure had an excellent safety record. But despite the best laid plans of mice and men the unexpected materialised and the catastrophic consequences were averted just!
On a fine day, the story of the Ship that went AWOL
By all accounts the weather on 23 January 1993 was fine. The good ship Havkong was loading Butane at its jetty at the Braefoot Bay Terminal by Aberdour on the banks of the Firth of Forth. Things were going just dandy. At 18.50 hours however, when the ship had loaded 6000 tonnes of a nominated 15,000 tonnes the area was subjected to an unusually violent, and totally unexpected squall. This squall produced a veering westerly wind with gusts in the order of 80 knots superimposed on a mean wind speed of 60 knots. The mooring lines failed and the ship began to move ahead along its berth driven by the wind. As she gained momentum the loading arms reached their limits and successfully disconnected with no spillage of Butane.
The Havkong began to swing under the influence of both the wind and the last of the moorings and drifted eastwards broadside to the wind. She narrowly cleared a ship on the other berth, which was loading ethylene, by approximately 20 metres. About eight minutes after breaking free her engine was ready for use and was used to keep the ship in the narrow deep-water channel between the berths and the offshore island as she drifted downwind while anchors were prepared. With a pilot aboard and with tug assistance she was eventually brought to anchor circa one mile east of the berth. If the vessel had run aground in Aberdour Bay, the emergency contingency plans would have entailed a precautionary evacuation of Aberdour, it would have been a national incident much reported and commented on, but luckily the vessel was finally anchored in Kirkcaldy Bay at approaching midnight when the emergency was declared over.
So the moral of the tale, if one exists, is that despite the best endeavours of all involved, if things can go wrong they will, and when you least expect them. Perhaps we can put the squall down to an Act of God, it had not been forecast, but the mooring procedures and equipment should have held the Ship on her moorings despite this but human error had to be a factor in that there were shortcomings in that respect, on that day.
In general it’s a good news story. The potential consequences of the incident were not realised.
Returning to the general theme with respect to Prelude Floating LNG. My concern is that this historically is the story of the Maritime transport of LPG and LNG. Incidents happen from time to time but consequences to date are limited. From 1964 to 2005 accident data list 22 spillages of LNG cargo during loading some of these spills causing fracture cracking of deck plates when the cryogenic liquid contacts with the carbon steel. The same data lists 19 LNG carrier vessel collisions and groundings, some pretty dramatic, but the saviour in all these events was the double skinned hull. So in terms of the gazillion or so ship miles and the ever increasing number of LNG carrier vessels the industry can with some merit say it has not lost a cargo or killed anyone and therefore it has an excellent safety record. Whether this is self-congratulatory without due cause is for others to judge. The risk analyst cannot disagree, if you accept, as the Industry appears to accept that the probability of spills and collisions are inevitable, but that you have put measures in place at considerable expense, such as double skinned hulls, then you deserve the benefit of this, do you not?
With respect to Prelude LNG operations we must assume grounding to be a negligible risk during normal operations since the vessel is located in an area with sea depths of 250 metres. Ship collision risks are ever present but history shows us that the combination of state of the art fenders and the strength of the hull would reduce the consequences of a collision between a carrier vessel and Prelude. The area where a collision could be less forgiving is the single point mooring at the bow of the vessel where the risers and anchor points are located. These risks are mitigated by the standard approach of the carrier vessel towards the stern of Prelude and as I understand it Prelude will have at least a couple of tugs ever present to assist in the mooring operations. It may be improbable, but studies suggest that it would take a large vessel colliding broadside with its bow normal to a Prelude to potentially cause damage to the internal Cargo tanks of such a vessel. It’s not known to the author how closely located Prelude will be to the main shipping channels offshore Northern Australia. However Prelude will have radar to spot possible collision potential, in heavy fog for example, and its tugs would respond I assume to avert the danger.
As observed in the Braefoot Bay incident the magnetic couplings where the cargo lines attach to the carrier vessel did their job and these couplings have no doubt evolved to be even more reliable. Human error however as always remains as a factor. LNG spills have occurred where significant damage to the deck plates resulted. The instantaneous and violent contraction of the metal on contact with the cryogenic liquid simply tears it apart. Overloading of tanks normally causes these spills, perhaps the Master fears being shortchanged so he loads his tanks to their capacity and in some cases the level control systems have been faulty or unserviceable. The ship Jules Verne on its maiden trip was out of service for 4 months after a cargo tank overflowed – so the damage can be significant.
Shell also had a similar problem when a discharging arm disconnected prematurely causing a star shaped fracture on the deck plate of its vessel the Methane Princess. At risk with ship to ship transfers, a risk not encountered when the carrier vessel is berthed against a jetty, is that cargo spillage could not only effect the vessel being loaded but the Prelude also. The difficulty sometimes in mitigating against one hazard on an offshore installation is that you create yet another. In order to safeguard against fracture cracking LNG spillage should be contained in a stainless steel tank normally filled with seawater. The seawater is necessary because the cryogenic liquid rapidly evaporates on contact lessening potential for deck fractures but the rapid evaporation produces copious amounts of methane vapour. It’s a case of being damned if you do or damned if you don’t.
Bill Campbell
ARTICLE ENDS
First article by Bill Campbell: Shell Prelude FLNG: loss of containment of hydrocarbons almost inevitable
Related articles
Pipelines and welding risks for Shell: Kashagan and Prelude(Article by an oil industry expert)
What should frighten stiff Royal Dutch Shell shareholders (Article by John Donovan)
Will Shell’s Prelude FLNG project be another white elephant?(Article by an oil industry expert)
Shell Bets on a Colossal Floating Liquefied Natural Gas Factory Off Australia (New York Times Article)
Royal Dutch Shell Prelude to disaster? (Article by John Donovan)
In 2 to 3 years gazillionaires will be coming out of Africa
Extract from an article by Nicholas Norbrook published 27 March 2014 by THE AFRICA REPORT
Kola Karim, Group Managing Director and Chief Executive Officer of Shoreline Energy International spoke to The Africa Report.
Q: Shell and Chevron are getting out of onshore operations. How big is this and where is it leading?
US now pumping 10 percent of the world’s crude
Extracts from an article by Emily Pickrell published 26 March 2014 by fuelfix
HOUSTON — Boosted by the galloping pace of tight oil operations, the United States produced a tenth of the world’s oil at the end of last year, the Energy Information Administrationreports. The shale boom has given the U.S. a production rate not seen since 1988, as tight oil replaced declining production in conventional fields. Almost two-thirds of U.S. tight oil comes from South Texas’ Eagle Ford and North Dakota’s Bakken shales.
Crackdown on Russia Could Hurt Western Oil
Extracts from an article bywith the headline: Crackdown on Russia Could Hurt Western Oil.
As the United States seeks to strengthen sanctions on Moscow for its occupation of Crimea, energy experts say the powerful Russian oil industry would make a robust target. But any penalties on energy investments, technology transfers and financial transactions would most likely also punish Western oil companies like Exxon Mobil that are investing heavily in Russia.
“Everything is on the table,” said David L. Goldwyn, the State Department’s coordinator for international energy affairs during President Obama’s first term. “The calculus has to be who will be hurt most, us or them, if sanctions are put in place.”
As the heart of the Russian economy, the energy sector — led by state oil companies like Gazprom, Lukoil and Rosneft — would be a natural focus for pressure from the United States and its allies. Oil and petroleum products represent more than two-thirds of Russian export earnings, and they finance just over half of the federal budget.
But the rub is that the interests of the Russian companies — many led by powerful allies of President Vladimir V. Putin — are increasingly entwined with those of American and European corporations, with which they share critical projects.
Royal Dutch Shell and Total, the French oil giant, are invested in the nascent Russian business of exporting liquefied natural gas. Several Western service companies are also involved in Russia, drilling and completing wells with the newest hydraulic fracturing technologies.
MEND claims Responsibility for Attack on Shell, Agip Facilities
Extract from an article by Segun James published 27 March 2014 by thisdaylive.com
The Movement for the Emancipation for the Niger Delta (MEND)Thursday claimed responsibility for the attack on the oil facilities owned by the Shell Petroleum Development Company (SPDC) and the Nigerian Agip Oil Company (NAOC) in Delta and Bayelsa State.
The TRUTH will set you FREE.
