Business
Shell Nigeria says theft of crude oil danger to oil industry
Adebayo Obajemu
Managing director and country chair for Shell Petroleum Development Company of Nigeria Limited, Osagie Osunbor, has said crude oil theft is anathema to the growth of oil industry and constitutes the greatest existential threat to the industry.
He stated that oil theft was one of the reasons that Nigeria had fallen behind in meeting her OPEC quota of 1.8 million barrels a day. He said the development has led to the shutdown of two of its major pipelines.
“Two of our most important pipelines in this country today are shut down with hundreds of thousands of barrels a day shut-in,” Okunbor said without giving details.
“It is a fact that the issue of theft, whether as a standalone or as the basis for us to meet our OPEC quota is an existential threat for this industry.”
Nigeria lost $1 billion in revenue during the first quarter of this year due to oil theft, the petroleum regulator said last week.
Shell has operated for decades in Nigeria and together with other oil majors, is selling onshore assets to focus on deep water drilling.
Okunbor said local companies which won licences to develop marginal fields would face challenges to transport their crude once they start production.
Marginal fields are smaller oil blocks located onshore or in shallow waters and are typically developed by local companies.
Oil theft has resulted in the declaration of force majeure at Bonny Oil & Gas Terminal, a pipeline transporting crude from the oil-rich Niger Delta to export vessels, among others, creating a hostile environment and disincentive to investors.
