A Review of the Nigerian Energy Industry

60,000bpd stolen daily from our lines – Shell MD

Mutiu Sunmonu, Shell MD01 August 2013, Lagos – The Managing Director, Shell Petroleum Development Company, SPDC, and Country Chair of Shell Companies in Nigeria, Mr. Mutiu Sunmonu, has said that about 60,000 barrels of oil are stolen daily in Nigeria.

Sunmonu stated this at the 37th Nigeria Annual International Conference and Exhibition, NAICE, organised by the Society of Petroleum Engineers, SPE, in Lagos.

Sunmonu, who was represented by Mr. Chike Onyejekwe, Managing Director, Shell Nigeria Exploration and Production Company Limited, SNEPCO, explained that activities of illegal refineries are damaging to the environment.

“He said: At some point this year, over 60,000 barrels of crude was being stolen from SPDC lines every day. The activities of illegal refineries are extremely damaging to the environment. A significant proportion of the stolen crude used in the illegal refineries is disposed off in the environment.

“The scale and complexity of this problem is beyond the control of any one company. Let us be honest. Let us consider genuine ways that can help stop this problem. Personally, I believe the perpetrators of these crimes need to be arrested and prosecuted. Until there is a deterrent, the industry doesn’t stand a chance against illegal bunkering of the scale we are seeing today” .

The Shell boss also said the impact of activities of crude oil thieves and illegal refineries on the environment in the Niger Delta and the Nigerian economy is now a crisis situation.

According to him, Nigeria depends on the oil industry for approximately 95 percent of export earnings and 80 percent of government revenue.

He said: “The government aspires to increase oil production to four million barrels per day, grow reserves to 40 billion barrels and earn as much as revenue from gas as oil by 2020. But in order to do this, we must tackle oil theft”.

Shell’s concern was further confirmed by th report of the Nigeria Extractive Industries Transparency Initiative, NEITI, which stated that Nigeria lost an estimated 136 million barrels of crude oil worth $11 billion, through stealing and sabotage.

NEITI also said that about 10 million barrels of products, worth $894 million, were also lost to pipeline vandalism in the downstream sector within the period under review. .

According to NEITI, the amount of losses in crude oil theft represents about 7.7 per cent of the total revenue accrued to the federation within the period.

– Sebastine Obasi, Vanguard

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