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At least eight people have been reported to have died in an explosion that set ablaze a pipeline in the oilfields of southern Nigeria, as the Shell oil company said it was unable to make deliveries to customers.
The oil giant declared a state of "force majeure," Wednesday night, a legal term allowing a party to a contract legally to breach its terms. The disruption has resulted in a loss of 180,000 barrels of oil per day, a Shell spokesman in London told AFP on Thursday.
The blast has pushed up world crude prices in its repercussions on the oil markets. On the New York Mercantile Exchange (Nymex), a barrel of "light sweet crude" for February delivery rose by 48 cents to 59.04 dollars around 11100 GMT.
On London's Intercontinental Exchange (ICE), the barrel of Brent for February went up by 53 cents to 57.25 dollars.
"We've declared force majeure last night, certainly force majeure on some cargoes coming out of (the) Bonny (terminal). The production deferred remains 180,000 barrels per day. We understand also that the gas supplies locally have been affected," Andy Corrigan in London said.
"A 28 inch supply pipeline .... has been ruptured, and potentially other pipes. There is a team on site now which has boomed off the oil spill, a fire fighting crew has been mobilised as well to put out the fire.
"Clearly there's lots of hydrocarbon around, and lots of water around so the oil can spread".
"We have shut down Bonny flow station in order to enable us to contain the fire, which is still raging, and carry out repairs," a company spokesman said in Nigeria on Wednesday.
"The fire has not gone out because it is being fed. Hence, the need to close another flowstation," said the official.
"We are cutting back the production and exportation and it also means that we won't be able to provide all the crude we were supposed to.
"The fire is still raging, today our guys are going there to fight the fire again. Hopefully we will manage today to stop it. Only after that will we be able to determine the extent of the damage, but we cannot yet say when the operations are able to start."
Shell said Tuesday that unknown persons had attacked its pipeline near the main oil city Port Harcourt resulting in a major spill and fire and slashing production by about seven percent of Nigeria's total crude export.
Preliminary investigations reveal that the fire may have been caused by a dynamite attack carried out by unknown persons. To help curb the fire, Shell shut its production from Diebu Creek and Nun River fields as well as all land area facilities except Rumuekpe.
Shell officials declined to comment on whether lives were lost in the explosion, which badly affected badly nearby communities.
But Thursday a police officer in Port Harcourt told AFP by phone that at least eight people had died in the blast.
"We don't yet have confirmation of their identity. It can be more. Investigations are going on, but as the explosion occurred in a very remote area, to go there is not easy at all," he said.
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