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Eni shuts Nigerian oil pipeline after fire

Matthew Lloyd | Bloomberg | Getty Images

Italian energy company Eni started closing the flow stations on a large Nigerian pipeline because of a fire, the company said on Sunday, in the latest blow to production in Africa's top oil exporter.

Eni did not say how much production would be lost. In previous shutdowns of the Tebidaba-Brass pipeline about 47,000 barrels per day (bpd) of output had to be deferred, industry sources said.

The fire comes less than two weeks after a problem during tanker loading caused a large amounts of oil to be spilled near an Eni facility in Nigeria.

There are hundreds of leaks every year from pipelines that pass through the delta's creeks, damaging the environment and the profits of oil companies including Eni and Royal Dutch Shell, especially when production has to be deferred.

OPEC-member Nigeria is losing about 400,000 bpd of its 2.5 million bpd production capacity because of persistent outages, helping to prop up global oil prices.

Many oil spills are caused by theft and pipeline sabotage, a crime committed daily in the Niger Delta, where millions live in poverty. The crude methods used to steal the oil often result in accidents that cause fires.

A number of spills are also a result of decrepit infrastructure.

"At the moment we do not have information on the cause (of fire). We have promptly started the shut-in operations for the flow stations related to the pipeline," an Eni spokesman said.

Oil companies are required to fund the clean-up of each spill and usually pay compensation to local communities if it was clearly the company's fault.

Nigerian legislators are considering a law to impose new fines on operators responsible for oil spills, which could land large foreign companies with penalties running into tens of millions of dollars a year.

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