Energy major Royal Dutch Shell plc (RDS.A) has decided to shut down its huge Bonga deepwater facility off the Nigerian coast following an oil leak. According to the Anglo-Dutch supermajor, the incident occurred on Tuesday (December 20) when a tanker was engaged in a routine operation to transport crude from the 200,000 barrels-per-day oilfield, roughly 120 kilometers from the country’s shoreline.
Shell – operating in Nigeria since 1937 – has apologized for the spill, putting the size of the leak at less than 40,000 barrels. Europe's most valued oil company ahead of BP plc (BP) and Total SA (TOT) claimed that the flow of oil was halted immediately, while stressing that no one has been injured in the incident. The group has also informed the relevant authorities, Nigeria's Department of Petroleum Resources and the National Oil Spill Detection and Response Agency, about the happenings.
Shell has been often criticized for crude spills from its onshore pipelines in Nigeria’s Niger delta. However, the company – currently the West African nation’s largest oil producer – has passed on the blame to pipeline sabotage and oil theft.
Since the last few years, Shell has come under a string of attacks from Nigeria's main militant group, The Movement for the Emancipation of the Niger Delta (MEND). Nigeria, one of the world’s largest oil producers and a top supplier of crude oil to the U.S., has struggled to control MEND's hostilities, which started attacking the country’s oil industry and kidnapping oil workers few years ago. Shell says that between 20,000 and 100,000 barrels of crude are stolen daily in Nigeria.
The Hague-based Royal Dutch Shell owns one of the largest integrated oil and gas businesses in the world. The group has operations all over the world and is involved in various activities related to oil and natural gas, chemicals, power generation, renewable energy resources and other energy-related businesses.
Royal Dutch Shell ADRs currently retain a Zacks #3 Rank, which translates into a short-term Hold rating. We are also maintaining our long-term Neutral recommendation on the stock.
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