UPDATE 2-Shell Nigeria reopens pipeline, oil spilled

* Local NGO says 6,000 barrels of oil spilled * Debate rages over 50-year-old Shell pipeline (Adds local NGO on spill, Shell response, background) By Tim Cocks LAGOS, July 5 (Reuters) - Royal Dutch Shell hasreopened the Trans Niger Pipeline after repairing a valve pointand removing oil theft connections, it said on Friday, but alocal environmental NGO said 6,000 barrels of oil had beenspilled. The pipeline (TNP) was closed on June 20 after an explosionand fire at a "crude theft point" deferring 150,000 barrels perday. "The Shell Petroleum Development Company of Nigeria (SPDC)has repaired the valve point and removed six other crude oiltheft connections," the company said in a statement. A member of an environmental watchdog, who declined to benamed, said he had seen large amounts of oil that had spilledinto the waters around the pipeline over the past few days. In a statement, local NGO the Stakeholder Democracy Network(SDN) said 6,000 barrels of oil had been spilled. Shell'sstatement said there had been a "residual leak", but did not sayhow much oil had leaked. It added a "clean up would be carried out in due course." Nigerian military authorities said last week they hadarrested eight people working for companies contracted by Shell,in connection with the pipeline fire. Shell has been pushing the government to make greaterefforts to combat stealing of oil - known locally as bunkering -which it blames for the theft of an estimated 150,000 bpd acrossthe industry in Nigeria, and for repeated oil spills and fires. Much of the stolen oil is exported via global criminalnetworks, although about 10 percent is processed locally inmakeshift refineries in the swamps and creeks of the delta. The area where the fire happened, Ogoniland, has sufferedrepeated oil spills that have blackened the landscape anddestroyed large swathes of its mangroves and fish, forcing localcommunities deeper into poverty. Environmental groups argue that Shell's 50-year-oldinfrastructure in the Ogoniland area is decrepit and must beshut down or replaced. "The TNP continues to be operated decades past its safelimit with oversight that is limited at best," the SDN said. Shell rejects that argument. "Shutting down the pipeline is not the answer ... thepipelines are healthy and fit for service," said Mutiu Sunmonu,Managing Director of Shell Petroleum Development Corporation, aShell-run joint venture with the state and other oil majors. "The only way to ensure the TNP operates optimally withoutbeing shut down regularly for repairs is to stop the thrivingcrude theft activities," he added. Nigeria's accountant general said last month oil theft andpipeline vandalism were responsible for a 5 percent fall inmonthly government revenues in May. The complicity of security forces, local politicians andeven some of the oil majors' own contractors in much of thetheft has cast doubts over how easy it will be to stop. (Additional reporting by Shruti Chaturvedi in Bangalore;editing by James Jukwey)