LONDON--Contractors working for a Royal Dutch Shell PLC (RDSB) unit have been arrested in Nigeria as alleged accomplices in the theft of oil that led to a pipeline fire.

One of the contractors, however, denies his staff was involved in the theft.

Shell Nigeria's joint-venture, Shell Petroleum Development Co., has previously said the Trans-Niger Pipeline, which carries 150,000 barrels a day of oil through the Niger Delta to the Bonny terminal, was shut after a fire Wednesday caused by oil theft.

A spokesman for the Nigerian army's Joint Task Force said that the army, upon arriving at the site of the fire, found eight people whom he said Saturday are employees of two contractors hired by SPDC to fix broken pipelines. He said they were arrested and "are helping our investigations as suspected accomplices."

A Shell spokesman said its Nigeria unit had been notified of the arrest of people employed by SPDC contractors "at a work site in the Bodo area" where the fire took place.

"We understand that the JTF is investigating the case, and we will cooperate with the investigations as necessary," he said.

A manager at one of the contractors named by the army, Steve Integrated Technical Services Ltd., confirmed that some of his staff was arrested but denied the allegations.

"My staff are not part of the crude-oil theft," said the manager, who declined to be named.

The manager said he had not been notified that they were suspected of being complicit in the crime, but the army spokesman said he was not obliged to inform the contractor of the allegation.

The manager said his staff were in tug boats near a barge carrying oil recovered from an illegal tapping point when an explosion occurred. He said thieves had tried to pump from the barge at night as his staff slept.

Despite the challenges faced in the area, Shell said Friday that it had given a green light to investments worth $3.9 billion, including a loop-line of the Trans-Niger Pipeline.

Source: Online.wsj.com